BP closer to bringing Azeri natural gas to Europe

A Canadian pipeline company said it secured a $200 million contract from BP to help develop the second phase of the Shah Deniz gas field off the Azeri coast.

ShawCor Ltd., which has headquarters in Toronto, said its pipe coating division secured the contract for work at a plant in Baku, the capital of Azerbaijan.

The contract is the second development contract awarded by BP for work in Azerbaijan this month. Energy services company Emerson Process Management secured a $40 million contract from BP to provide control and safety systems for an onshore terminal associated with Shah Deniz

BP has awarded more than $1 billion in development contracts since selecting the Trans-Adriatic pipeline as its option for Shah Deniz last year. TAP is a part of a European corridor of pipelines meant to carry Azeri natural gas.

Azerbaijan's vast natural gas reserves are seen as a foundation for European energy diversity strategies.

European countries get about 20 percent of their gas reserves from Russia. Most of that runs through the Soviet-era pipeline network in Ukraine and ongoing geopolitical disputes there add a layer of risk to European energy security.

First gas from the second phase of the Shah Deniz gas field is expected by Europe in late 2018.

In May, BP said most of the contracts for a natural gas pipeline from Azerbaijan to Europe have now been awarded.

Pipeline construction is slated for January and should be completed by 2017.