Azerbaijan’s Shah Deniz Project Moves Forward with $321M Azfen Contract

The Azerbaijani-Turkish joint venture Azfen has signed a contract with the Shah Deniz consortium as part of the Shah Deniz Compression (SDC) project at the Shah Deniz gas-condensate field.

The $321 million contract covers the construction of the upper modules of the SDC platform, including fabrication, assembly, installation, and integration of the 8,500-ton top modules, The Caspian Post reports, citing bp-Azerbaijan, the technical operator of the project.

Construction will take place at Azfen’s fabrication yard in the Sabail district of Baku, utilizing local infrastructure and resources.

According to the company, construction of the upper modules is scheduled to start in the fourth quarter of 2025 and is expected to be completed by the end of 2028. The project will involve over 3,000 workers, more than 90 per cent of whom will be local specialists.

bp Senior Vice President of Projects Ewan Drummond emphasized that awarding the contract to Azfen is based on its proven track record, including successful delivery of previous top module construction projects for offshore platforms in Azerbaijan.

The Final Investment Decision (FID) for the SDC platform was signed by the Shah Deniz field development project shareholders on June 4, 2025, with the total project cost estimated at $2.9 billion. The project is expected to enable the production and export of approximately 50 billion cubic meters of additional gas and 25 million barrels of additional condensate from the field. Construction is planned to begin in 2025, with the platform expected to become operational by 2029.

The SDC platform will be located 3 km from Bravo and 10 km from Alpha. The construction of the support structure, upper modules, and subsea infrastructure components will take place in Azerbaijan, with onshore construction and commissioning scheduled for 2026-2028.

The platform is designed to capture low-pressure gas from certain reservoirs at Shah Deniz, compress it, and deliver it to the Sangachal terminal. Gas will be received from Alpha and Bravo platforms. The SDC platform is dedicated solely to compression equipment and does not include drilling operations. Production of the first low-pressure gas is scheduled for June-July 2029 from Alpha and April-May 2030 from Bravo.

The project also includes the construction of an electrified SDC facility operating mostly unmanned, the installation of electrical and fiber-optic cables, and field subsea pipelines connecting Alpha and Bravo. The platform will be equipped with four 11 MW compressors for gas compression.