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BP awards construction contracts for Azerbaijan ACE project

20/09/2019
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BP has announced the awarding of key contracts for the covering engineering, fabrication and construction, project management and other services on the Azeri-Central-East (ACE) project, part of the Azeri-Chirag-Deepwater Gunashli (ACG) field development in Azerbaijan.

BP are the operator of the ACE project, which is also jointly owned by SOCAR/AzACG (25%), Chevron (9.57%), INPEX (9.31%), Equinor (7.27%), ExxonMobil (6.79%), TPAO (5.73%), ITOCHU (3.65%), and ONGC Videsh (OVL, 2.31%)
(Image via BP)

The awards follow the project final investment decision (FID) announced in April.

The ACG field is located in the Azerbaijan sector of the Caspian Sea, over an area of 432km2. An agreement with the government of Azerbaijan extended the life of the field until 2049. From this, the $6 billion ACE project was born. 

Located on the ACG field, around 120km east of Baku, the ACE project aims to process 100,000 barrels of oil and 350 million standard cubic feet of gas per day. First oil is expected in 2023, with production estimated to reach a total of 300 million barrels over its life.

The latest contract agreements signal the beginning of the project’s construction, which is expected to be completed by 2022. It’s thought that this construction phase will create 8,000 jobs.

In a statement, BP announced that the following contracts had been awarded:

1.    The contract for the fabrication of the jacket for the ACE platform and skirt piles has been awarded to the consortium consisting of BOS Shelf LLC and Star Gulf FZCO. The value of this contract is around $260 million.

The scope of work of the contract includes shop and erection engineering, rolling of tubulars, fabrication and assembly of the jacket and skirt piles, commissioning of installation systems, load-out and sea-fastening of the facility.

All construction and fabrication work under this contract will be undertaken at SOCAR's Baku Deepwater Jacket Factory (BDJF) named after Heydar Aliyev, using local resources including workforce and construction yard facilities.

The construction works have already commenced and are expected to be completed in 2021.

2.    The second contract is for the fabrication and integration of the topsides unit for the ACE platform. This contract was awarded to Azfen in July 2019. The value of the contract is more than $486 million.

The scope of work under this contract includes fabrication and erection engineering, and fabrication, assembly and integration of the platform topsides. This also includes the fabrication of a lightweight drilling package (to be designed by National Oilwell Varco), provision of commissioning support services, load-out, hook-up and offshore commissioning support.

The topsides unit will be built at the fabrication yard in Bibi-Heybat near Baku. The construction works under this contract have already commenced and are expected to be completed in 2022.

3.      The topsides drilling facility engineering, procurement and construction supervision contract has been awarded to National Oilwell Varco (NOV) (USA). The value of this contract is more than $151 million.

The scope of work under this contract includes detailed design, engineering and equipment procurement and shipment of the drilling facility to Baku. The scope also includes construction supervision oversight of the topsides unit and drilling facility fabricator’s activities including rig fabrication, integration, hook-up and commissioning.

4.      The contract for engineering, procurement and construction of the living quarters for the platform has been awarded to Emtunga Solutions AB (Sweden). The value of this contract is around $34 million. In addition to the engineering, procurement and construction, the scope of work includes provision of integration and commissioning technical support for the living quarters.

The works under this contract have already commenced with completion expected in 2022. Assembly and commissioning of the living quarters will be carried out at the fabrication yard in Bibi-Heybat near Baku where the topsides unit for the platforms will be constructed using local resources. 

5.    The contract for execute engineering has been awarded to the SOCAR-KBR LLC joint venture. The value of this contract is more than $76 million.

The scope of work under this contract includes engineering of the topsides unit, jacket and skirt piles; the ACE project brownfield works; the system design engineering for subsea facilities; project management - materials management, interface management, information management; procurement support; quality management and provision of construction site support. The work for this contract has started and is being performed through SOCAR-KBR’s UK Leatherhead and Baku engineering offices.

6.    The contract for the freight management services was awarded to Transglobal Projects (TGP) LLC in August 2019 as part of the Regional Master Agreement.

The scope of work under this contract includes collection of the materials and equipment from the suppliers’ locations and delivery to Baku sites, including customs clearance.  The services to be provided under this contract cover all forms of transportation - international and domestic road transport, river ships, barges, sea transportation, air charters, airfreight and railway.

Ewan Drummon, BP’s Vice President for Projects commented: 

“BP as operator is pleased to announce the first package of key contracts awarded to execute the ACE project safely, efficiently and on schedule. As we celebrate the 25th anniversary of the ACG contract it is worth emphasizing that one of the main achievements of ACG is the high level of local content in our projects which the ACE contract awards show clearly. 

“These contract awards once again highlight the ACG partnership’s commitment to optimising the use of Azerbaijan’s local resources.  Construction activities, which have commenced this year and will run through mid-2022, are taking place in-country utilizing local resources and it is expected that, at peak, construction works will create up to 8,000 jobs.”

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BP awards construction contracts for Azerbaijan ACE project - Time to read 5 min
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