MEGAPROJECT: ON THE FINISH LINE

Both the local and foreign media have demonstrated an enormous interest to the construction of an oil and gas terminal in the Sangachal settlement near Baku from the very beginning. Moreover, many high-ranking foreign guests have included visits to the terminal in their agendas. It is understandable - the facility was already positioned as one of the largest terminals in the world. Numerous pipeline systems, huge tanks, and various work camps stretched out on the vast territory have always been a source of unadulterated admiration even for the people far from energy projects.

Tortoises of Sangachal

At the beginning of construction, media tours to the Sangachal terminal were frequent, and we were given a full opportunity to observe the processes taking place in this small town for a few hours. Project managers would tell us how hard they try their best to be in line with environmental protection guidelines and to keep the original flora and fauna on the terminal area, to improve the life of people working there. After the construction of the terminal ended and the actual transportation of oil from Azerbaijani offshore oil and gas fields to pipeline systems started, there was really nothing to show to the journalists except the daily routine work of operators...

Recently we had yet another opportunity to see the terminal with a more extended territory and with new facilities built to receive gas from the Shah Deniz Stage 2 development project. In fact, only the road leading to the terminal has not changed since our last visit to Sangachal; everything is still deserted and dull. And there are clear standards of safety engineering put in place by BP, the operator of all important energy projects in Azerbaijan, which work perfect in this part of the world. But more on that later.

On our next visit to the terminal, we were interested whether one of its famous landmarks, a tortoise farm, is still there. Back in 2001, during the discussions of the Environmental Impact Assessment (EIA) document, local environmentalists alarmed about a possible harm caused to the rare animal species inhabiting the territory of the terminal. In particular, a special emphasis was made on spur-thighed tortoises (Testudo graeca) protected in Azerbaijan. Environmentalists argued that the loss of habitat because of construction works could lead to the extinction of these rare animals. Then, BP made concessions and spent considerable money to build a special farm for tortoises, and hired qualified workers to care for them. “Any tortoise found on the territory was caught and transferred to the farm. There she was cared for until a certain period, then released into nature. But the most insulting was that when we asked environmentalists to come and evaluate the results of the work done to meet their demands, there was no reaction,” told us privately one of the participants of those events. Either way, the farm is no longer on the terminal, as all tortoises reached the age when they could be released into nature.

Human capital

Our first impression at the entrance to the terminal after at least a four-year break was the incredible scale of both the territory and objects located there. After the expansion of the Shah Deniz Stage 2, the terminal has grown by more than 70 hectares, and currently covers a little over 600 hectares being one of the largest oil and gas facilities in the world.

As before, its purpose is to receive, process, store and transport oil and gas produced in the Caspian fields developed by BP. Eight pipelines provide an access from offshore installations to the terminal and to the export routes. In addition, the terminal receives oil from third countries, including Kazakhstan and Turkmenistan.

The oil-processing facilities of the terminal are operating at full capacity: the crude oil is stored in four huge tanks with a capacity of more than 25.5 thousand barrels each. More than 6 million tons of oil can be processed and transferred to the markets annually.

The most interesting processes are going on the gas-processing facilities of the terminal. The testing of new installations constructed under Phase 2 is underway. The general manager of the terminal expansion project told us about this, which was another pleasant surprise of the media tour. In fact, it was pleasing to see that the head of such an influential and large project is an Azerbaijani, highly skilled specialist Rahman Rahmanov, whereas previously such posts were invariably occupied by foreigners. We were informed that the overwhelming majority of the management of oil and gas projects in Azerbaijan operated by BP is made up of local experts. Undoubtedly, this is one of the most significant advantages for our country, which is quite comparable with financial revenues from all oil and gas projects. In general, more than 80% of the workforce involved in all BP oil and gas projects in Azerbaijan is made up of local staff. This is yet another clear sign of the transformation of oil capital into a human one, which is much more valuable and durable.

“The expansion of the Sangachal terminal began in 2014. 9.5 thousand people were involved in the implementation of these works. Currently, the staff of the terminal is 800-1000 people; after the expansion, the number of employees will increase by 150 people,” said R .Rahmanov.

But it is important to note that none of the employees were injured during the works, which is the best indicator of high standards and the justification of BP’s excessive attention to security issues.

Finish line

In fact, the supply of interesting statistical data has always been an integral part of the terminal operation from the very beginning of construction works. It turned out that 2.2 million meters of cables and 134 kilometres of pipelines were laid and 19,000 tons of metal structures were installed on the territory of the terminal.

Rahmanov said that the construction of all the facilities was 100% completed last year, and they will soon finish the testing of these facilities. “We test them to identify likely leaks, as well as conduct power and other tests of new installations. According to our plans, the testing will be carried out through the first quarter of the year. To date, 86 hermetic tests have been carried out; the demolition of temporary installations has been fulfilled by 81%. All preparations for the operations phase is complete. The commissioning of the facilities is completed by 26%,” said R. Rahmanov.

According to the general manager, in the first quarter of this year, it is also planned to prepare a new infrastructure for integration to the general terminal system, as well as operations for commissioning of gas systems. “At the end of the second quarter, it is planned to pump the first volumes of gas through the new facilities of the Sangachal terminal. In 2018, it is planned to process 2 billion cubic meters of gas within the Shah Deniz Stage 2,” said R. Rahmanov.

After the construction of new facilities, the terminal’s gas processing capacity will grow to about 100 million cubic meters daily, that is almost twice the existing capacity.

Rahmanov also reminded that $20b of $28b funds allocated for the Shah Deniz Stage 2 have already been spent. In other words, the management will reach the finish line with significant budget savings. This is an almost unthinkable achievement in our time of dynamically changing prices for construction materials and sharp fluctuations in exchange rates.

Either way, the expansion of the Sangachal terminal for receiving new volumes of gas within the Shah Deniz Stage 2 approaches the finish line with impressive achievements. Given that the project planned for the production and export of hydrocarbons from the Shah Deniz Stage 2 is one of the largest projects in the world, a successful example of its implementation is one of the most significant indicators for Azerbaijan as a reliable and stable business partner able to undertake the most difficult business ventures.