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Azeri Shakh-Deniz II gas at least 2 yrs late - source

  The second output phase of gas from the Azeri Shakh-Deniz Caspian Sea field will come online in 2014 at the earliest, a BP source said on Friday, later than previous estimates.

The second phase, estimated to cost around $10 billion, has been identified as a source of gas for the Nabucco pipeline project, aimed at diversifying Europe’s supplies.

The chief executive of StatoilHydro ASA, which co-leads the project, had said producers were very likely to miss a 2011-2012 startup target.

“We’re saying we expect second phase production to begin by 2014 plus,” said the BP source. “By the end of 2010 we expect to have all the pre-engineering and design work done and have the second phase sanctioned by then,” he said.

Norway’s StatoilHydro and BP control Shakh-Deniz, which produces around 15 million cubic meters of gas per day and has reserves of 1.2 trillion cubic meters. The source added that the company had no clear production target for the second phase of the field.

Turkey and Azerbaijan are in talks regarding the transit of the gas, but these have been delayed by demands from Ankara for a share of the gas that will pass through Turkish territory.

Azeri state energy company Socar is also a partner in Shakh-Deniz, along with Russia’s LUKoil, France’s Total and Iranian and Turkish state firms. (Reuters)