BP and its partners have taken a final investment decision (FID) on the $2.9 billion Shah Deniz Compression project and approved two linked low-carbon schemes that will electrify the Sangachal oil-and-gas terminal with power from a new 240 MW solar plant in Jabrayil. The agreements were announced during Baku Energy Week and mark BP’s biggest round of commitments in Azerbaijan since the original Shah Deniz sanction two decades ago.
Third phase for a “world-class” gas field
The Shah Deniz Compression phase—BP’s eighth major project slated to start between 2028 and 2030—adds an unmanned compression platform to tap lower-pressure reserves, unlocking an estimated 50 billion m³ of additional gas and 25 million barrels of condensate. First gas is targeted for 2029. Partners in the giant Caspian Sea field are BP (operator, 29.99 %), Lukoil, TPAO, SGC, NICO and MVM.
Cutting emissions while freeing gas for export
To curb operational emissions, BP and SOCAR sanctioned the twin Shafag Solar (240 MW) and Sangachal Terminal Electrification projects. Renewable electricity sold to grid operator AzerEnerji will be “swapped” back to power Sangachal, allowing the terminal’s gas-fired turbines to shut down and releasing extra fuel gas for export. Construction of both schemes is due to start later this year, with staged completion in 2027-28.
New acreage and a fresh partner
BP also farmed into two exploration and development licences—the discovered Karabagh oil field and the Ashrafi-Dan Ulduzu-Aypara (ADUA) area—taking a 35 % operated stake in each. In a separate deal, Türkiye’s TPAO acquired 30 % of BP’s Shafag-Asiman block to speed up appraisal after a 2021 gas-condensate discovery. The moves align with BP’s goal of restoring its reserves-replacement ratio to about 100 % by 2027.
Strategic significance
Executive vice-president for production and operations Gordon Birrell said the package “extends production, supports European gas security and deepens our 30-year partnership with Azerbaijan.” The Shah Deniz expansion is expected to help lift BP’s global upstream output to 2.3–2.5 million boe/d by 2030, with room to grow further by 2035.
With fresh gas volumes, a flagship solar farm and new exploration acreage, BP is doubling down on Azerbaijan as a cornerstone of its upstream growth strategy—while advancing its pledge to cut operated emissions worldwide.
