Hogan Lovells Advises Shah Deniz on Landmark Agreements with Nabucco Pipeline

London, 5 February 2013 - Hogan Lovells advised members of the Shah Deniz Consortium (BP, Statoil, SOCAR, and Total) on an equity option and funding agreement; and the Shah Deniz Consortium on a co-operation agreement, both with Nabucco Gas Pipeline International GMBH (Nabucco) and its existing shareholders (OMV, BOTAS, BEH, Transgaz, RWE and FGSZ).

The agreements were signed on Friday 18 January 2013 and provide for the joint funding and development of the Nabucco West project, an option to acquire an aggregate 50% interest in Nabucco should Nabucco West be positively selected as the Shah Deniz Consortium's export route for Shah Deniz gas to Europe, and further co-operation between the parties regarding the development of the Nabucco West pipeline project.

Conclusion of these agreements with Nabucco (and similar ones with the Trans Adriatic Pipeline (TAP)) marks a significant milestone in the Shah Deniz Stage 2 Gas Project, as it provides the basis for the final negotiations on the project contracts for European pipeline gas sales and gas transportation.  Hogan Lovells is fully engaged on this process as project counsel for the Shah Deniz Consortium.

In June 2012, the Shah Deniz Consortium selected Nabucco West as its preferred pipeline option for the potential South Eastern Europe export route for Shah Deniz Gas, having already selected the TAP as its preferred pipeline option for the alternative potential export route for Shah Deniz Gas to Greece and Italy.

It is currently anticipated that the Shah Deniz Consortium will make its final gas export route selection by the end of the second quarter of 2013. The European Union strongly supports the delivery of Shah Deniz Gas to the EU, regardless of which pipeline is chosen, as it will establish the Southern Gas Corridor which is a key plank in the EU's strategy to increase diversification of gas supplies to European markets.

The Hogan Lovells team advising on the Nabucco transaction was led by London energy and corporate partner Richard Tyler, assisted by consultant Jeremy Deeley and senior associates Oliver Searle and Alex Harrison (on corporate and project finance matters) and partner Matthew Levitt, counsel Alix Muller-Rappard and associate Alex Olive on competition and regulatory matters. Austrian law advice was provided by Wolf Theiss, led by partner Richard Wolf.

Commenting, Richard Tyler said:

"The signing of these agreements, following extensive negotiations with multiple parties, is an important step forward in the development of the Shah Deniz Stage 2 Gas Project. As a firm we are proud to have advised on this phase of the transaction and look forward to helping our clients drive the Shah Deniz 2 project forward towards its final investment decision".

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