Saipem, in consortium with BOS Shelf LLC and BOS Shelf International FZCO (both affiliates of SOCAR, the State Oil Company of the Azerbaijan Republic), has been awarded three new offshore contracts for the Shah Deniz Compression project operated by BP in Azerbaijan. The overall value of the contracts is approximately USD 700 million, of which Saipem’s share amounts to about USD 600 million
Shah Deniz Compression project - About it
The Shah Deniz Compression Project represents a major new phase in the development of one of the world’s largest gas-condensate fields, located 70 kilometres offshore in the Azerbaijan sector of the Caspian Sea.
The project aims to sustain plateau gas production from the Shah Deniz Stage 2 facilities by adding compression capacity at the existing Shah Deniz Alpha platform and installing a new compression platform.
Once complete, the project will enable the continued export of natural gas through the Southern Gas Corridor, a key route that delivers Caspian gas to markets in Europe. In doing so, it reinforces Azerbaijan’s position as a cornerstone in the region’s long-term energy security and low-carbon transition strategy.
Contract Details and Scope of Wwork
Under a framework agreement signed in July 2024, Saipem will lead execution of the offshore package in consortium with its SOCAR-affiliate partners. The collaboration leverages local assets and capabilities to enhance knowledge transfer and maximise local content participation.
The pipelay barge Israfil Huseynov, owned by Azerbaijan Caspian Shipping, will be deployed and operated by Saipem for subsea pipeline installation.
The contract package spans the Azerbaijan sector of the Caspian Sea and comprises three key workstreams:
Transportation and Installation (T&I) of a new 19,000-ton compression platform, to be executed using the advanced installation vessel Khankendi.
Engineering, Procurement, Construction and Installation (EPCI) of approximately 26 kilometres of offshore pipelines connecting the new compression platform to existing Shah Deniz infrastructure.
Execution of all major permanent subsea works, including structural foundations, tie-ins and subsea system integration.
Construction and installation activities are expected to commence in the third quarter of 2026, with completion targeted for 2029
Strategic Importance
This latest award reaffirms Saipem’s long-standing partnership with BP in the Caspian region and underscores its track record in delivering technologically advanced offshore projects.
Strategically, the Shah Deniz Compression Project strengthens Saipem’s role in the global gas value chain—supporting a critical link between the Caspian and European energy markets, while reinforcing the company’s expertise in complex, high-technology offshore developments.
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