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"It is clear that GDF Suez is the best placed company for the second EPR. It will provide a nuclear alternative to EDF," said CM-CIC Securities analyst Patrice Lambert de Diesbach.
GDF Suez has said it would decide at the start of this year whether or not to put in a bid for the EPR contract, estimated to cost in the region of 4 billion euros ($5.36 billion).
EDF, France's main electricity provider, is also a candidate for the reactor.
For EDF, the technology behind EPR plants is a key part of its expansion plans following last year's acquisition of British Energy and around half of the nuclear power business of Constellation Energy.
However, Exane BNP Paribas analyst Benjamin Leyre said giving the contract to GDF Suez would allow the French government to introduce more competition in the sector.
"Both EDF and GDF Suez have their respective political support but giving the second EPR to GDF Suez would allow France to thwart any criticism from the European Commission of allowing a monopoly in that sector," he said.
GDF Suez, French oil major Total and nuclear reactor maker Areva have submitted a proposal to develop two EPR reactors in the United Arab Emirates, and Leyre said such bids would be helped if GDF Suez won the French EPR contract.
"For GDF Suez, it would be a confidence boost. They already know how to run nuclear facilities, and their strong balance sheet would allow them to finance the investment. These two factors would help them win more overseas deals," said Leyre.
GDF Suez shares were down 1.3 percent at 32.76 euros in late afternoon trade. The stock has fallen around 7 percent since the start of 2009, having lost 12 percent in value last year.
(Reporting by Benjamin Mallet, editing by Will Waterman) ($1=.7461 Euro) Keywords: GDFSUEZ/NUCLEAR
(sudip.kargupta@reuters.com; +33 1 49 49 54 52; Reuters Messaging:sudip .kargupta.reuters.com@reuters.net)
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