BAKU, July 16 — SOCAR-KBR LLC, the joint venture between Azerbaijan’s state oil company SOCAR and U.S.-based engineering firm KBR, has signed two major new contracts with bp to support strategic energy infrastructure projects in Azerbaijan.
According to a press release from KBR, the contracts cover:
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The Sangachal Terminal Electrification Project (STEL)
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The Shah Deniz Compression Project (SDC)
Under the agreements, SOCAR-KBR will provide detailed engineering and procurement services for both initiatives. The contract values were not disclosed.
Engineering Led by Local Expertise
SOCAR-KBR’s Baku office will lead implementation, drawing on a team comprised of over 95% Azerbaijani engineers, designers, and specialists, with support from KBR’s international workforce.
“These additional awards reflect bp’s continued confidence in the quality of SOCAR-KBR’s services,” the company stated, noting that SOCAR-KBR had previously executed the FEED (Front-End Engineering Design) for both projects.
STEL: Cutting Emissions at a Strategic Terminal
Designed by KBR, the Sangachal Terminal is one of the region’s most critical oil and gas export hubs. The STEL project—valued at $230 million—aims to connect the terminal to Azerbaijan’s national grid, managed by Azerenerji. The upgrade is expected to reduce operational emissions by 50%, replacing seven gas turbines with electric systems and freeing up natural gas for export.
Construction is scheduled in two phases:
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Phase 1 to be completed by mid-2027
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Final commissioning by the end of 2028
SDC: Boosting Gas Output from Shah Deniz
The Shah Deniz Compression (SDC) platform marks the next phase in the $2.9 billion development of Azerbaijan’s flagship offshore gas field. On June 4, 2025, project shareholders approved the Final Investment Decision (FID) in Baku.
The goal of SDC is to enable extraction of low-pressure gas reserves, thereby maximizing recovery rates. The new platform is expected to allow the export of an additional 50 billion cubic meters (bcm) of gas and 25 million barrels of condensate over its operational lifetime.
Construction will begin in 2025, with commissioning targeted for 2029.
“Sangachal’s electrification is a major step in Azerbaijan’s decarbonization path. And SDC brings efficient, safe solutions to the next stage of Shah Deniz,” said Jay Ibrahim, President of KBR Sustainable Technology Solutions.
These projects underscore Azerbaijan’s long-term role as a reliable energy partner for Europe, while demonstrating SOCAR’s increasing emphasis on domestic engineering capabilities and climate-conscious infrastructure.
