Russia’s Lukoil has signed an agreement to acquire an additional 15.5% stake in the Shah Deniz natural gas project in the Azerbaijan sector of the Caspian Sea from Malaysia’s Petronas for US$2.25bn.

The field, located 70km south-east of Baku, at a depth of 600m, was discovered in 1999 and started commercial production in 2006. It covers an area of approximately 860km² and is the largest natural gas field in Azerbaijan.

Last year, the Shah Deniz consortium extracted 18.1bcm of gas and 3.6m tonnes of gas condensate from the field. The gas produced is sold on the markets of Azerbaijan, Georgia, and Turkey.

BP is the operator of the project with a 28.8% stake, while TPAO (19%), SOCAR (10%), NICO (10%), and SGC (6.7%) are its other partners.

This deal enables Lukoil to increase its stake in the project from 10% to 25.5%.

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