Phase 2 at Shah Deniz delayed, Baku says

BAKU, Azerbaijan, Sept. 18 (UPI) -- Development of the second phase of the Shah Deniz gas and condensate field is delayed to 2016 because of a lack of export contracts, officials said.

Representatives from the State Oil Co. of Azerbaijan Republic said Phase 2 development was delayed because the company lacks firm commitments on a pipeline to export the gas and corresponding contracts, the Azerbaijan Business Center reports.

SOCAR said there are "problems" with Phase 2, noting sanctioning of a pipeline would be difficult without an export contract. Before SOCAR begins development at Phase 2, SOCAR added it needed to know the tariff for pumping and the price of its gas.

Azerbaijan is keen to expand its gas market as regional customers flock to Baku to tap its expansive natural resources. Baku, however, has failed to reach several exports deals, including one with Ankara.

Meanwhile, the BP-led consortium managing the development of the Shah Deniz gas and condensate field in Azerbaijan halted production for repairs on one of its wells.

Reinhard Mitschek, managing director of Nabucco Gas Pipeline International GmbH, included Azeri gas as one of the potential "first suppliers" for the planned $10.3 billion project for Europe.