Lukoil Overseas: Shah Deniz Gas Condensate Field Develop. II

Location:

Azerbaijan

Project number:

45599

Business sector:

Natural resources

Notice type:

Private

Approval date:

15 Jan 2014

Status:

Complete

PSD disclosed:

08 Nov 2013

Translated version of this PSD: Azerbaijani

Project Description

The proposed financing is a pre-planned increase to the existing exposure of the Bank to the Lukoil Overseas Shah Deniz Ltd (“LSD”) relating to the development of the off-shore Shah Deniz gas and condensate field (“SD”) in Azerbaijan. LSD holds a 10% interest in SD field.

Financing is sought for the stage 1 extension of field development and implementation of the more advanced technologies, including on the existing terminal and platform.

Transition Impact

The transition impact potential of the proposed project is expected to derive from a significant transfer of new technologies, skills and knowledge unique for the region. The Project is also supporting a more widespread private ownership in the Azeri upstream gas market.

The Client

LSD is Lukoil Overseas' 100% subsidiary. Lukoil Overseas is a holding company that manages Lukoil’s participation in exploration and production projects outside Russia. In Azerbaijan the Lukoil group has various oil and gas activities. The UK's BP is the operator for the upstream development of SD.

EBRD Finance

Senior loan of US$ 200 million (not syndicated).

Project Cost

Total SD Stage 1 extension and modernisation project cost estimate is US$ 2128 million.

LSD stage 1 project cost estimate is US$ 212.8 million.

Environmental Impact

The project has been assigned Category C as the environmental due diligence was completed under the original Shah Deniz project..
As this project is limited to additional financing for the existing project, and the business activity for which EBRD financing is requested was fully covered under the original project appraisal, no additional environmental appraisal is required on this project.

The original appraisal of this offshore gas production project was completed as part of the comprehensive evaluation of the ACG, BTC, Shah Deniz and SCP oil and gas production and transportation, which included detailed Environmental and Social Impact Assessments and comprehensive public consultation.

The ESIA, ESAP and other related documents can be viewed here or on the EBRD website. As shown here the Operator of this project prepares detailed annual EHS reports documenting activities on the project over the year and summarizing EHS performance. In addition to this, the Company is providing EBRD detailed monthly reports highlighting business activities and performance. As shown in the reports available on the web site, this project has a high level of transparency and is adhering to strict international and national standards. Numerous external and NGO auditing reports are available for the associated oil and gas projects.

Technical Cooperation

None.

Company Contact

Aleksandr Karasev
JSC Lukoil
Sretenskiy blvd, 11
Moscow, 101000,
Russia
Email: mail@lukoil-overseas.com

or

Ms. Kseniya Solodnikova
Principal Banker
EBRD
Tel: +4957871111

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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