Saipem lands Shah Deniz contract

MILAN, Italy, May 1 (UPI) -- Italian company Saipem said it won a $1.8 billion contract from BP for engineering and construction work at the Shah Deniz field off the coast of Azerbaijan.

Saipem will transport and install pipelines and associated infrastructure for operations at the second phase of the Shah Deniz field, located about 50 miles off the coast of Azerbaijan in waters as deep as 1,800 feet.

Saipem CEO Umberto Vergine said the Caspian basin is a strategic area that could eventually help meet European energy needs.

"I’m very pleased that Saipem will be involved in the development of Shah Deniz stage 2, which will ultimately deliver gas to Europe," he said in a statement Wednesday.

Last year, the BP-led consortium working in the natural gas field selected the Trans-Adriatic pipeline as its conduit for European consumers. The pipeline is part of the Southern Corridor, a network of pipelines planned to add diversity to a European market dependent on Russian natural gas.

BP estimates the second stage of Shah Deniz will be able to produce more than 560 billion cubic feet of natural gas per year, adding to the 310 billion produced annually from the initial phase.

First gas from the second phase is expected in late 2018.