Lukoil Shah Deniz Stage II Extension



Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

18 Jul 2017



PSD disclosed:

19 Jun 2017

Translated version of this PSD: Azeri

Project Description

Provision of a loan to LUKOIL Overseas Shah Deniz Ltd ("LOSD") to extend additional financing for its share in the second stage of the development of Shah Deniz, an offshore gas exploration and production project in Azerbaijan (the "Project") and one of the largest gas fields in the world. LUKOIL has a 10% stake in the Shah Deniz field. The project is managed by BP plc.

The loan is fully guaranteed by PJSC LUKOIL.

Project Objectives

The project includes two additional bridge-linked offshore gas platforms, 26 subsea wells, 500km of subsea pipelines, and the expansion of the gas plant at Sangachal Terminal.

Transition Impact

The transition impact of the proposed project is expected to come from (a) the demonstration of new products to the region (hub-linked gas sales agreements) and (b) innovative subsea E&P technologies. As part of the transaction, the Bank is exploring additional transition components towards the demonstration of best practices in the sector.

Client Information


LUKOIL Overseas Shah Deniz Ltd ("LOSD") is an SPV indirectly and fully owned by PJSC LUKOIL.

EBRD Finance Summary

USD 100,000,000.00

Up to USD 100 million.

Total Project Cost

USD 400,000,000.00

Up to USD 3,000 million

Environmental and Social Summary

The project has been assigned Category C (in accordance with the 2014 ESP) as no additional EHS appraisal is required. This is an extension to an existing project (DTM 46766) which was board approved on 22 July 2015. While the existing Project is Category A requiring a full Environmental and Social Impact Assessment (ESIA), this was completed for the original loan and as the Project definition has not changed, nothing additional is required in terms of the ESIA. All EHS monitoring and reporting requirements on the loan to date have been satisfied. The 2016 Environmental and Social monitoring report for this project completed by an independent consultant is available in the public domain. It should be noted that the original project was approved by the Board with derogation to EBRD PR requirements relating to the lack of Environmental and Social Management Plans in the public domain. While this information is not included in the disclosed ESIA package, this information was requested from BP as part of our original review, and upon our review of such plans it can be confirmed that this information has been prepared, communicated verbally to the local communities and is available for use; however, it is not disclosed. As part of our appraisal of this project we will attempt to get these plans disclosed thereby avoiding the need to seek the same derogation.

Based on previous experience on this project, and on review of the information and documents provided as part of the original appraisal (some disclosed, some not disclosed) and the ongoing monitoring we believe the project is being managed and monitored in a responsible manner, consistent with the EBRD Environmental and Social Policy, even though the ESIA package of documents available in the public domain are not fully compliant with EBRD PRs.

Original ESIA: EnglishAzeri

BP Azerbaijan Annual Sustainability Report (including Shah Deniz II)

Independent Review of the ESIA

EHS Monitoring Reports

2016 | 2017(1) | 2017(2)

Environmental and Social Management Plans

Shah Deniz Stage 2 Summary ESMPs

Technical Cooperation


Company Contact Information

Oktay Movsumov
PJSC LUKOIL Sretenskiy blvd, 11 Moscow, 101000, Russia

Business opportunities

For business opportunities or procurement, contact the client company.

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General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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