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BP-Led Caspian Gas Project to Cost Up to $30 Billion

Dec. 30 (Bloomberg) -- The BP Plc-led Shah Deniz natural-gas development will cost as much as $30 billion, compared with a previous estimate of $25 billion, said Rovnaq Abdullayev, president of State Oil Co. of Azerbaijan, or Socar.

“In total, the second phase of Shah Deniz will cost $28 billion to $30 billion,” Abdullayev told reporters today in the Azeri capital of Baku.

BP is developing the Shah Deniz field in partnership with Socar, Statoil ASA, Total SA, OAO Lukoil, Turkiye Petrolleri AO and Naftiran Intertrade Co. European Union countries are seeking a supply link with the Caspian to diversify away from Russia, provider of about a quarter of the EU’s natural gas, after disruptions of deliveries sent through Ukraine during disputes between the two nations.

The Shah Deniz partners plan to make the final investment decision on the second phase of Shah Deniz phase at the end of 2013, Abdullayev said. The partners also approved a plan to spend $6 billion on construction of platforms and infrastructure next year, the Socar president said, adding that the first gas from Shah Deniz will reach the EU by the end of 2017 or in the first quarter of 2018.

To contact the reporter on this story: Zulfugar Agayev in Baku at zagayev@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net

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