TODAY.AZ / Business

BTC Pipeline: When one pipeline is hiding others

27 August 2006 [23:11] - TODAY.AZ
The Baku-Tbilisi-Ceyhan (BTC) pipeline, constructed to transport Caspian Sea oil from the Azerbaijani capital of Baku to the Turkish terminal in Ceyhan on the banks of the Mediterranean, was inaugurated amid great fanfare in July.

This 4-billion dollar pipeline redraws the resource and geopolitical map of the region and paves the way for further regional projects of scale.

On May 25 2005 the Baku pumping station opened, signaling the launch of the BTC. More than a year later, on July 13 2006 the opening ceremonies at the other end of the pipeline in Ceyhan finalized its construction, a few days after the first litres of black gold arrived in the Mediterranean from the Caspian. The Turkish, Azerbaijani and Georgian presidents - Ahmed Necdet Sezer, Ilham Aliyev and Mikheil Saakashvili respectively - met at the Turkish station in Ceyhan for the inauguration of the BTC in the presence of Turkish deputies and representatives from 32 nations.

Representatives from the eleven companies holding stakes in the BTC consortium, which is responsible for the construction and management of the pipeline, attended the ceremony: British Petroleum (BP), the consortium manager, (30.1%), the Azerbaijani national oil company SOCAR (25%), the American company Unocal (8.9%), Norway's Statoil (8.7%), Turkish TPAO (6.5%), Italian ENI (5%), French Total (5%), ConocoPhillips (2.5%), Amerada Hess (2.35%), the Japanese group Itoku (3.4%) and Inpex (2.5%).

The opening of the pipeline had been delayed on several occasions. Initially expected at the end of 2004, delivery of the first litres of crude from the Caspian to oil tankers in Ceyhan did not begin until May 29 2006.

The oil comes from the Azeri-Chirag-Gunesli deposits in the Azerbaijani sector of the Caspian Sea. The predicted flow is 50 million tons per year - nearly a million barrels per day and equivalent to 6-7% of total world production.

The 1,774-kilometer pipeline has capacity to hold 10 million barrels of oil, stretching across 449 kilometres of Azerbaijan, 235 kilometres of Georgia and 1,059 kilometres of Turkey, before reaching the Turkish port of Ceyhan.

Turkey hopes the BTC will transform Ceyhan into another 'Rotterdam'. Iraqi oil from deposits in Northern Kirkouk has been transported through Ceyhan for the last 28 years. Turkey plans to construct another pipeline between the Mediterranean port of Samsun in Northern Turkey and the Ceyhan terminal to alleviate congestion in the Turkish straits in the northwest, which provides passage to mainly Russian oil-tankers.

On another shore of the Caspian Sea, Kazakhstan, also an important oil producer (150 million tons per year predicted by the end of 2015), sees the pipeline as an opportunity to reorient its oil exports. In 2005 Kazakh Prime Minister Daniel Akhmetov said the country wanted to deliver around 30 million tons per year via the BTC, which would make Kazakhstan the principal exporter using the pipeline. An accord between Baku and Astana was signed in June 2005.

Under this accord, Kazakhstan will export 25 million tons of oil via the BTC per year for 25 years. The Kazakh Minister of Industry and Energy, Natig Aliyev, has recently indicated that the BTC should increase its capacity to 75 million tons per year to meet production in Kazakhstan.

There appear to be two ways in which Kazakhstan could achieve its oil-exporting objectives: the construction of new terminals on both sides of the Caspian and of five 60,000-ton capacity oil-tankers, for a total investment of approximately 3 billion dollars. Alternatively, Kazakhstan could seek an agreement with Azerbaijan to extend the BTC along the other bank of the Caspian Sea to the port of Aktau in Kazakhstan. If such an agreement is signed, this additional section of the pipeline across the Caspian would run over 700 kilometers and cost about 3 billion dollars.

Aside from oil resources, natural gas also has the potential to make the partner countries more energy independent. In July 2006 the Azerbaijani president Ilham Aliyev highlighted the "strategic weight" of the Baku-Tblisi-Erzerum (BTE) natural gas pipeline, which is planned to transport gas in Turkey from the Shah Deniz deposit in the Caspian Sea.

This project seems all the more promising on the heels of the economic cooperation forum which convened in Baku in May 2005, featuring representatives of ten member-states (Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan, and Uzbekistan). The Kazakh Prime Minister appeared to be in favour of linking Kazakhstan to the BTE. The connection would be made by a gas pipeline beneath the Caspian Sea between Kazakhstan and Azerbaijan.

By Francois Gremy

/www.caucaz.com/

URL: http://www.today.az/news/business/29447.html

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