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BP's Shah Deniz Project Acquires Vessel Khankendi for $378M

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Oil giant BP plc’s (BP - Free Report) operated Shah Deniz project has received its modern subsea construction vessel – Khankendi. The cost of the vessel is $378 million.

About Khankendi

The new flagship vessel, Khankendi, has been constructed and designed to set up the largest subsea production system in the Caspian Sea as part of the Shah Deniz Stage 2 project. The vessel is to be positioned at the Shah Deniz field and expected to carry out subsea installation and construction work over the next 11 years.

Having a deck space of 2000 square meters, the vessel measures 155 meters in length and 32 meters in width. The vessel weighing 17,600 tons has a carrying capacity of 5,000 metric tons at 6.5 meters draft. It includes two engine rooms with generators having a capacity of 6*4.4 megawatt (MW) and 2*3.2 MW. The vessel has a dynamic positioning to facilitate working in significant wave height of 3.5 meter. The other features comprise a 900-ton main crane accomplished of placing 750 ton subsea structures down to 600 meters below sea level, an 18-man two-bell diving system, two work-class ROVs and a strengthened moon pool. Complex activities can be performed by the Khankendi without any attachments.

The vessel has a maximum capacity of 175 people aboard, including the marine crew and discipline specialists. The personnel include both Azerbaijani nationals and expatriates with plans for extensive training, leading to the full nationalization of the staff.

The Khankendi has been constructed at the Baku Shipyard, which is a joint venture of SOCAR, the Azerbaijan Investment Company (AIC) and Keppel O&M.

About Shah Deniz Stage 2

A giant project, Shah Deniz Stage 2 or Full Field Development (FFD) is expected to add an incremental capacity of 16 billion cubic meters per year (bcma) of gas production to about 9 bcma yielded by Shah Deniz Stage 1.

A capital investment of about $28 billion will be required to produce gas and transfer it to the Georgia-Turkey border. Henceforth, supplementary pipeline systems will carry 6 bcma of gas to Turkey and an additional 10 bcma of gas to markets in Europe, via a route known as the Southern Gas Corridor. Shah Deniz gas will move 3,500 kilometers, to elevations of over 2,500 meters and over 800 meters below the sea.  

One of the largest gas developments in the world, Shah Deniz Stage 2, will boost European energy security by transporting Caspian gas resources to markets in Europe for the very first time.

Price Movement

The company’s share price has lost 1.4% compared with the industry’s increase of 1% over the last three months.


Zacks Rank & Key Picks    

Currently, BP carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include TransCanada Corporation (TRP - Free Report) , Transmontaigne Partners LP (TLP - Free Report) and Range Resources Corporation (RRC - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company delivered an average positive earnings surprise of 4.06% over the last four quarters.

Transmontaigne, headquartered in Denver, CO, involves in transporting and storing refined petroleum products. The firm delivered an average positive earnings surprise of 6.60% over the last four quarters.

Based in Fort Worth, TX, Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of U.S. oil and gas resources. The company’s 2017 earnings are estimated to grow 1587.17%.

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