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British energy giant BP plc (BP - Analyst Report) led Shah Deniz consortium has started appraising the final offers with respect to transportation options it received from the Nabucco Gas Pipeline International and Trans Adriatic Pipeline (TAP) for Shah Deniz Stage 2 gas to Europe.

The Shah Deniz consortium is now entering the detailed assessment phase wherein each of the transportation proposals will be evaluated thoroughly. The analysis will help in deciding the ideal export route to Europe based on pre-established selection criteria.

The selection criteria include commerciality, project and financial deliverability, engineering design, alignment and transparency, operability, scalability and public policy. The consortium is likely to make a final decision on the European pipeline by the end of Jun 2013.

The transportation offers comprise extensive information relating to the technical, regulatory, financial and other aspects of the Nabucco West and TAP projects. The offers were expected to become official this month. Moreover, binding gas sales offers from prospective gas buyers are also anticipated in April.

BP is the operator of Shah Deniz II. Other partners in the project are Lukoil, Total SA (TOT - Analyst Report) and Statoil ASA (STO - Analyst Report) as well as Socar, Turkiye Petrolleri and Naftiran Intertrade.

The project will open up the Southern Gas Corridor by transporting gas from the Caspian Sea to markets in Turkey and Europe. Shah Deniz Stage 2 is estimated to augment gas production by another 16 billion cubic meters per year (bcma) from about 9 bcma from Shah Deniz Stage 1.

Located about 70 kilometers offshore in the Azerbaijan sector of the Caspian Sea, the Stage 2 development of the Shah Deniz field is projected to consist of two new bridge-linked production platforms, 26 subsea wells to be drilled with 2 semi-submersible rigs, 500 kilometers of subsea pipelines, a 16 bcma upgrade for the South Caucasus Pipeline and the Sangachal Terminal. Additional pipelines will be put up and extended to carry gas from Shah Deniz through Turkey and Europe.

BP holds a Zacks Rank #3 (short-term Hold rating). However, the Zacks Ranked #1 Range Resources Corporation (RRC - Analyst Report) is expected to outperform the market over the next few months.
 

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