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AZERBAIJAN - Exports & Rival Pipeline Projects.

Baku, with Washington's backing, wants to be the hub for oil and gas pipelines from the Caspian to Europe. The Caspian, the world's largest inland sea, stands between the oilfields of western Kazakhstan and Europe. Washington has been actively promoting a set of trans-Caspian pipelines for oil and gas to reach Europe through Baku and Turkey's Mediterranean terminal of Ceyhan, with the US Trade and Development Agency having put up $750,000 to fund feasibility studies.

However, experts have warned about the unpredictable and active seismic nature of this partly shallow sea. Pipelines laid on the seabed would be exposed to risk yet to be properly studied. As a result, some companies have proposed a safer alternative. Years before Amoco of the US was bought by BP in 1999, Amoco Eurasia proposed a cheap alternative: a fleet of tug-pushed, double-hulled barges to ply across the sea from Aktau (Kazakhstan) to Baku. They would carry up to 500,000 b/d of Kazakh crudes. From Baku these crudes, as well as AIOC's exports, would be pumped by pipeline to Ceyhan or to the Georgian Black Sea port of Supsa. The fleet would only cost about $400-500m and could be put into operation within 30 months.

Azeri crude oils have been processed at the two refineries in Baku, which now have a combined capacity of more than 413,000 b/d. A small amount of crude is bought from Russia and Kazakhstan for refining (see DT No. 1).

Azerbaijan is the only net exporter of oil products in the Caspian region. Its refineries export more than 140,000 b/d of fuel oil, gasoil and diesel and jet fuel. The markets are the Mediterranean, Russia, Iran, China, Kazakhstan, Kyrgyzstan and Tadjikistan. The Mediterranean market was opened in late 1997 through traders like Marc Rich who take products by rail to the Georgian port of Batumi on the Black Sea. The 175,000 b/d Nova-Baku refinery, which has a 34,400 b/d catalytic cracker, exports nearly two-thirds of its diesel and half of its jet fuel output.
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Publication:APS Review Oil Market Trends
Date:Jul 10, 2000
Previous Article:AZERBAIJAN - The Geology.
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