BP says Azerbaijan will finalize EU gas sale deals next month

BP Plc said partners in Azerbaijan’s Shah Deniz natural-gas project will finalize gas sales agreements with European buyers in September.

Terms of sales have already been agreed with a number of buyers in Italy, Greece and Bulgaria, the BP office in the Azeri capital of Baku said by e-mail late Tuesday.

A BP-led group developing the Caspian Sea deposit selected the proposed Trans-Adriatic Pipeline, or TAP, in June to export 10 billion cubic meters of gas a year to the European Union from the Turkish-Greek border.

The EU is looking to Shah Deniz, estimated to contain 1.2 trillion cubic meters of gas, and other fields in the Caspian to cut dependence on Russian supply, which feeds a quarter of its needs. BP said a final investment decision on the second phase of the Shah Deniz project is expected in the fourth quarter.

Capital expenditure on the offshore Azeri-Chirag-Guneshli project, also led by BP, rose to $1.3 billion in the first half from $1.2 billion a year earlier, the UK producer said. A decline in production at the field slowed to 2.4 percent in the half from a 12 percent drop in the same period a year earlier. [Bloomberg]