Total is in talks to sell its 10% stake in the Shah Deniz II gas field, making it the second energy major to reduce its exposure to a project promoted to help Europe diversify its supplies.
LONDON, Feb 28 (Reuters) - France's Total plans to sell its 10 percent stake in Azerbaijan's Shah Deniz II gas field, sources with knowledge of the matter said, the second major to cut exposure to a project aimed to provide an alternative to Russian gas in Europe.
"Total's strategy is to divest from projects where it has a minority stake and favour those where it is the operator," one of the sources said on Friday.
A spokesman for Total declined to comment.
Another source said that Turkish state pipeline firm Botas, which is already developing the pipeline section to pump Azeri gas into Turkey and onward towards the European Union, was in talks to buy Total's sake in the project.
Analysts said Total's move was probably a result of lower Russian gas prices, which made investment in expensive new gas sources less attractive.
Russia's Gazprom has granted price reductions and repayments to customers across Europe, including Germany's RWE and E.ON, Italy's ENI and Edison as well as and France's GDF Suez, in order to make its gas more attractive against rising competition.
At the same time, European gas demand has been weak due to the region's slow economic growth and to competition from cheaper coal in the power generation sector.
"Facing weak demand and high (Russian) supply, prices have gone down 15 percent in the last two months. This will make alternative supplies more difficult to arrange when hub prices are below 60 pence per therm," said Thierry Bros, senior gas analyst at French Bank Societe General.
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