Chicago Bridge & Iron Company N.V.
) recently announced that it has received an $85 million contract
from a consortium led by
) for the Shah Deniz Stage II project.
The Shah Deniz gas field is the largest natural gas field in
Azerbaijan. It is situated in the South Caspian Sea, off the
coast of Azerbaijan, approximately 70 kilometres (43 miles)
southeast of Baku. This gas field, discovered in 1999, is
supposed to supply gas directly to Europe. The Shah Deniz field
is primarily operated by BP which has a 25.5% share in it.
The scope of the contract requires CBI to provide core
services including engineering and project management for
advancing the South Caucasus Pipeline Expansion (SCPX) project of
the field. This critical pipeline will become the mode for
transferring gas between the Shah Deniz field and Turkey passing
through Azerbaijan and Georgia.
The field has a present annual production capacity of about 10
billion cubic meter (bcm) of natural gas. The next phase, Shah
Deniz II, is vital for Europe as it will present an alternative
gas supply to Russia's Gazprom. Shah Deniz II is expected to
become operational in 2019 and produce 16 bcm of gas annually. Of
the total 16 bcm of gas production, 10 bcm will be allocated for
Europe and the remaining 6 bcm for Turkey.
The consortium involved in the development of Shah Deniz
), The State Oil Company of Azerbaijan Republic (SOCAR), BP and
others. This consortium has recently awarded a $750 million
construction and supply contract for the development of Shah
CBI is a leader in the Liquefied Natural Gas (LNG) storage
market, where it expects more opportunities to win contracts,
especially in LNG/low temperature storage systems
(petrochemicals). Such deals are expected to increase the
company's market share in the domain.
CBI currently has a Zacks Rank #3 (Hold). Another
better-ranked stock in the sector that can be considered at the
) which sports a Zacks Rank #1 (Strong Buy).
BP PLC (BP): Free Stock Analysis Report
CHICAGO BRIDGE (CBI): Free Stock Analysis
MASTEC INC (MTZ): Free Stock Analysis Report
STATOIL ASA-ADR (STO): Free Stock Analysis
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