BP: Sangachal Terminal Electrification project progressing on schedule

Construction activities for the Sangachal Terminal Electrification (STEL) project are progressing safely and on schedule, BP-Azerbaijan, the operator of the Sangachal terminal, told Report.

To date, the project has awarded three major contracts to ensure the terminal is fully electrified by the end of 2028:

1. Engineering, Procurement and Construction (EPC) contract

Valued at approximately $43 million, this contract has been awarded to AzerEnerji OJSC. The scope includes three key activity areas: construction of a new substation, installation of underground cables and erection of overhead power lines. As part of this contract civil works are nearing completion across all fronts, with equipment installation and cable-pulling activities set to commence as the project transitions into its next delivery phase.

2. Construction and fabrication contract

This $19 million contract has been awarded to Azfen MMC for major electrical infrastructure works within the Sangachal terminal, including installation of transformers, synchronous condensers, current limiting reactors, and a new 110kV switchyard. As part of the contract construction activities within the Sangachal terminal commenced in August 2025 and are advancing across multiple work fronts, including foundations for key equipment installations.

3. Engineering and procurement contract

As earlier announced, this is a £7 million contract that has been awarded to SOCAR KBR to execute the Sangachal terminal engineering and procurement scope. Under this agreement, SOCAR KBR will provide detailed design, equipment supply, and procurement management services. The scope also includes support for construction, commissioning, and operations readiness planning. As part of this contract, project activities are in progress, with current efforts focused on detailed engineering and equipment expediting.

Matt Kirkham, BP vice president, projects, for the Azerbaijan, Georgia and Türkiye region, Middle East and Africa, said: "We are pleased with the progress across all STEL project activities. With work scopes advancing in line with the plan, the teams remain committed to delivering high-quality outcomes and supporting the safe and efficient development of the project. This is a complex, multi-year effort requiring close coordination across multiple contractors and disciplines, and I'm proud of the professionalism and dedication shown by everyone involved. As we move into the next phases, our focus remains on safety, high quality and strong execution that will deliver a resilient power infrastructure that will support the terminal's long-term operational excellence."

The STEL project is developed and managed by BP as operator of the Sangachal terminal. The completion of the project is expected in two stages – Stage 1 in mid-2027, and Stage 2 by the end of 2028.

The project is linked to the Shafag (Jabrayil) solar project, which consists of construction of a new 240MW AC solar plant in the Jabrayil district of Azerbaijan via a new commercial structure called 'virtual power transfer arrangement', which will enable the terminal to connect to the national grid, operated by AzerEnerji, via new facilities to be built both within and outside the terminal, including a new 220/110 kV electricity substation.

Together, the Shafag and STEL projects are expected to support the reduction of operational emissions by around 50% over the future life of the Sangachal terminal, based on the current outlook and plans.

Following the electrification of the terminal, the seven gas turbines currently used at the terminal to generate power, will be removed in phases, freeing up the fuel gas for export.