Sangachal Terminal

=Overview=

The Sangachal Terminal is one of the world’s largest oil and gas terminals. It spans an area of 500 square kilometres (km) and is made up of two main parts: the Early Oil Project (EOP) and the Sangachal Terminal Expansion Programme (STEP). The EOP construction first started in 1996 and ended in 1997. In February 2002, STEP construction began. The first oil from the Central Azeri field reached Sangachal in February 2005.

A crucial link in Azerbaijan’s energy industry, the terminal is situated 55km south of Baku. It receives, processes, stores and exports crude oil and gas produced from Azerbaijan’s offshore oilfields in the Caspian Sea, namely the Chirag field. From the terminal, treated crude and gas are transported to storage tanks and eventually pumped to export pipelines to supply foreign demand.

According to BP, the operator of Sangachal, the EOP terminal houses four crude oil storage tanks with a capacity of 25,500 cubic metres each and can process, store and export in excess of 6 million tonnes of crude oil per year. The terminal has a processing capacity of 1.1 million barrels (149,000 tonnes) of oil per day and 36.8 billion cubic metres (bcm) of gas (25.5 from Shah Deniz and 11.3 from ACG).

STEP is the expanded part of the terminal that receives, stores and processes oil from Azeri and Deepwater Guneshli sections of the Azeri-Chirag-Guneshli field and gas from the Shah Deniz field. BP has stated that about half of the people employed at the terminal are locals from neighbouring towns and villages.

According to Bloomberg, as of May 2012, Sangachal exported 1.4 billion fewer barrels of crude oil than a year before, due to a fall in production at the Azeri-Chirag-Guneshli oil field. BP also recorded that the Terminal exported 5.8 million more cubic metres, compared with the year before, of Shah Deniz natural gas. Around 22 million cubic metres flowed daily from the terminal through the South Causasus Pipeline in the first quarter of 2012.

=Expansion Plans=

As part of Shah Deniz Full Field Development, plans were made to expand the Sangachal Terminal further. This will increase its capacity to process 16 billion cubic metres of gas per year, further increasing the importance of the terminal to Azerbaijan’s energy sector.

=Security Concerns=

In Azerbaijan, a number of government agencies play a role in energy infrastructure security.The Sangachal Terminal is under the protection of the Special State Protection Service (SSPS). It is also responsible for the physical protection of onshore infrastructure such as the primary export lines. However, BP is responsible for overall security inside the wall surrounding Sangachal Terminal, contracting some of the work to a private company named Titan.

According to a leaked US diplomatic cable from July 2008, the Sangachal Terminal appears to be the most vulnerable onshore facility, with the point where the offshore pipelines reaches land en route to Sangachal also raising concerns. The cable reports that 'since Sangachal Terminal is the central node for energy collection and transport, any successful large-scale attack at the facility would be "catastrophic," in the words of one BP security official. However, the surrounding pipelines and pump stations appeared' to be in good shape as of 2008, both from the standpoint of technical and physical protection and having a well-designed response plan.

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