Oil giant BP Plc (BP) expects the replacement of corroded pipelines at the Prudhoe Bay oil field in Alaska to cost around $100 million, a company source said on Thursday, but the total cost to BP will likely be several times this figure.

The expected cost includes around $20-$30 million for the steel pipeline, the source said, well above the $15 million that one steel analyst estimated on Wednesday.

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The BP source said the higher than predicted cost was because the company was "a distressed buyer."

A BP spokesman said it was too early to give a figure for repairs at the field, in which BP has a 26 percent stake, and Exxon Mobil Corp (XOM) and ConocoPhillips (COP) own 36 percent each.

BP unexpectedly announced the phased shutdown of the U.S.'s largest oil field on Sunday to replace 16 miles of pipeline at the field after it discovered severe corrosion.

As of Wednesday, production had been halved to 200,000 barrels per day and BP, the world's third largest fully publicly traded oil company by market value, expects a decision on Friday about whether a full shutdown can be averted.

The company has not put a figure on how much the lost production will cost it but a spokesman said BP's average profit margin in the U.S. was $25 per barrel. This suggests a full outage would cost BP $2.6 million per day or $350 million if the field is fully shut down until the year-end.

The U.S. government does not expect full production to resume before January 2007.

Analysts also expect the loss of Alaskan crude to hit profitability at BP's refineries on the U.S. west coast. These have been integrated into the Alaskan operations and analysts are concerned the facilities may not have the flexibility to handle other grades of crude efficiently.

This could see BP miss out on U.S. refining margins, which have been running around record levels in recent months.

Earlier on Thursday, analysts at Sanford C. Bernstein cut their target price on BP's shares to 630 pence from 720 pence to reflect the impact of higher production costs and higher maintenance expenditure following the discovery of the pipeline corrosion.

BP shares traded down 0.97 percent at 613-1/2 pence at 1036 GMT, compared to a 1.06 percent fall in the DJ Stoxx European oil and gas sector index.

Around $10 billion has been wiped off BP's market capitalization since the discovery of the corrosion was announced.

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