BP to build massive pipeline manufacturing hub in Azerbaijan for Karabagh field

British energy giant BP announced plans to begin construction on a specialized pipeline bundle manufacturing facility in the third quarter of 2026, marking a critical infrastructure milestone for the development of the Karabagh offshore field.

According to the project’s final Environmental Impact Assessment, the facility will be situated in the Bandovan settlement, approximately 20 kilometers south of Alat.

The site was selected for its favorable terrain and direct access to the Caspian Sea, which is essential for the launch of large-scale subsea components.

The plant will focus on the production of pipeline bundles—complex, pre-fabricated assemblies that house production flowlines, control lines, and injection lines within a single protective outer casing. 

These bundles, which can reach lengths of up to 6 kilometers, are designed to streamline subsea installations.

Construction is scheduled to run through the first quarter of 2028. Once commissioned, the facility will feature a production workshop, rail lines for assembly, a sea launch ramp, and an operational accommodation camp. 

While the primary mission is to support the Karabagh project, BP indicated the hub could service other Caspian offshore developments in the future.

The Karabagh field, located 120 kilometers east of Baku, sits at a water depth of 150 to 200 meters. Preliminary estimates place geological oil reserves at more than 60 million tons, with approximately 21 million tons of recoverable oil and 13 billion cubic meters of gas. 

Analysts at Fitch Ratings expect peak production at the field to reach 7.5 million barrels per year.

BP solidified its role in the project on June 3, 2025, during Baku Energy Week, when it signed an agreement with the State Oil Company of Azerbaijan (SOCAR) to acquire a 35% stake. BP serves as the project operator, while SOCAR retains the remaining 65% interest.

The development represents a strategic expansion of BP’s footprint in the region, utilizing the Bandovan facility to bridge the gap between onshore manufacturing and deep-water extraction.