British oil giant
) shares nudged up 0.3% to close at $42.46 per share on Friday as
investors cheered the recently concluded 25-year sales agreements
of the Shah Deniz consortium. The consortium, of which BP is the
operator, has closed the deals for just over 10 billion cubic
meters a year (BCMA) of gas.
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The gas produced at the Shah Deniz field in Azerbaijan will be
directly transported to Europe for the first time, thanks to the
development of Stage 2 of the Shah Deniz project. This agreement
will open up the Southern Gas Corridor.
About 16 BCMA of Shah Deniz Stage 2 gas will be transferred
through 3,500 kilometers of pipelines via Azerbaijan, Georgia,
Turkey, Greece, Bulgaria, Albania and under the Adriatic Sea to
Italy. This gas would be bought by nine companies in Italy,
Greece and Bulgaria.
The latest agreement follows the pact with BOTAS in 2011, to sell
6 BCMA of gas in Turkey. The parties that have agreed to purchase
the gas are Axpo Trading AG, Bulgargaz EAD, DEPA Public Gas
Corporation of Greece S.A., Enel Trade SpA, E.ON Global
Commodities SE, Gas Natural Aprovisionamientos SDG SA, GDF SUEZ
S.A., Hera Trading srl and Shell Energy Europe Limited.
Of the total quantity booked, about 1 BCMA will go to buyers
planning to supply to Bulgaria and Greece and the balance will go
to buyers planning to supply to Italy and neighboring markets.
The gas sales agreements will be implemented after the final
investment decision on the Shah Deniz Stage 2 project is made by
the end of 2013.
BP has a stake of 25.5% in Shah Deniz. Other co-venturers are
), Lukoil, NIKO and TPAO with a holding of 25.5%, 10%, 10%, 10%,
10% and 9%, respectively.
BP carries a Zacks Rank #3 (Hold). However, the Zacks Ranked #1
(Strong Buy) stock of
China Petroleum & Chemical Corp.
) is a good buying option for the short term.