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TURKEY - Regional P/Ls Through Turkey - The Baku-Ceyhan Oil Pipeline.

After several years of hard bargaining among the major powers and oil firms involved, a consortium for the Baku-Tbilisi-Ceyhan (BTC) pipeline project was formed in early April 2002. A sponsor group (SG) led by BP then agreed on a plan to finance the $2.9 bn project, which to carry Azeri crude oil from Baku to Ceyhan via Tbilisi - with the pipeline running 1,730 km and having a capacity of 1m b/d. This went on stream in late 2005.

Work on construction began in June 2002 and was completed around mid-2005. It runs through the Georgian capital Tbilisi and then through the Turkish cities of Erzurum, Erzincan and Kayseri, before reaching Ceyhan.

The BTC consortium includes all the members of the SG, being the shareholders in the Azerbaijan International Oil Co. (AIOC) which is developing three oilfields in the Azeri sector of the Caspain Sea. The BTC group is led by BP (38.21%) and the partners are the Azeri NOC Socar, Statoil, Unocal, Agip, Itochu, ConocoPhillips, TPAO, Inpex and Delta/Hess.

The government of Kazakhstan and majors operating there are considering a proposal to join an expanded version of the BTC venture. This calls for crude oil from Kazakhstan to be pumped through a pipeline to be built beneath the Caspian Sea to Baku. The US is promoting this as well as a parallel Kazakh gasline to Europe through the BTC route.

(A comprehensive survey of Azerbaijan will be published from late July 2006 through Vol. 67. This will be part of a new series to cover all the CIS petroleum exporting countries).

On April 29, 2004, Iran inaugurated at Neka a swap agreement with several Caspian oil producers launched in 2003. National Iranian Oil Co. (NIOC) executive Reza Kasaiezadeh then said Iran was already importing 125,000 b/d from Kazakhstan, Turkmenistan and Russia via the Neka terminal to be refined in Tehran. Under the deal, Caspian crude oil producers deliver a volume to one of Iran's northern ports, and pick up an equal amount of Iranian crude from a port on the Persian Gulf. A pipeline between Neka and Tehran transports the Caspian oil to the refinery in the capital.

Kasaiezadeh said it would cost about $2/b to transport the crude oil using this method. He claimed the BTC operations would cost the line's users three times more (see Vol. 62, Gas Market Trends No. 18).
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Publication:APS Review Gas Market Trends
Date:May 8, 2006
Words:402
Previous Article:TURKEY - The Lease.
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