Georgian leg of BTC to work out to $1 billion

Meanwhile, the Georgian budget will be remitted some $25 million in project fees for the use of port and railway infrastructures, as well as customs’ duties and labor taxes.

The implementation of the project also means the payment of $14 million in workforce payments, with an additional $5 million to be allocated for social projects and a $3-million procurement to address environmental concerns in Georgia. It is said that the projects employ the combined staff of 6,000, of whom 85 per cent are citizens of Georgia.

According to David Glendining, BP manager for public relations, the Georgian section of the South Caucasus (Baku-Erzurum) gas pipeline, to supply Azeri gas from the Shah Daniz field to Turkish and, possibly, Greek markets, has been 50 per cent completed. “Georgia needs 1.2 billion cubic meters per year of gas, and the demand is set to grow within 10 years,” Glendining said.

He said that during the lifetime of the Baku-Ceyhan and Baku-Erzurum pipelines, Georgia would get more than $1 billion in transit fees. Of the total, $700 million will come from BTC’s operation, with the remaining $350 million to be benefited from the exploitation of the gas line.

Georgia will be given an opportunity to buy – at preferential terms – up to 500 million cubic meters per year of gas, in excess of 300 million cubic meters of the annual turnout in transit fees.

The first oil is expected to enter Georgia, at the Azerbaijan-Georgia borderline, by the end of July. BTC’s troubled Georgian section survived several near misses, is said to have 90 per cent completed, and needs at least a month to get filled in with crude oil from the Azari – Chirag – (deepwater) Gunashli concession, offshore Azerbaijan. In September, the crude will start to flow to the Turkish section of the pipeline.