Georgia Says Supsa Pipeline Would be Ready

TBILISI (Reuters)–Repair work on an oil pipeline linking Azerbaijan to Georgia’s Black Sea oil export outlet could be completed on time by the end of the year–a top Georgian energy official said on Friday.

Georgi Chanturia–President of the Georgian International Oil Corporation–said the only factor which may affect the timing on repairs was the possible decision to double its current capacity.

"The Baku-Supsa oil pipeline can be completed by the end of the year if AIOC’s (Azerbaijan International Operating Company) shareholders don’t decide to raise its capacity,” Chanturia told Reuters in an interview.

He said that to make the Baku-Supsa route viable–a decision may be taken to raise its capacity by increasing the pipeline’s diameter to 42 inches from 22 inches.

The route runs from the Azeri capital Baku to the Georgian outlet of Supsa on the Black Sea.

The 13-member AIOC consortium–operator of the $8-billion project to develop Azeri–Chirag and Guneshli off-shore fields in the Caspian–is led by an alliance between British Petroleum and Norway’s Statoil.

The consortium has set an end of 1998 completion date for repair and reconstruction work on the pipeline.

Initially the project included the refurbishment of 761 kilometers of existing pipeline–the construction of an 86 km new section of pipeline–an on-shore terminal and offshore loading systems.

The plan was to transport up to five million tons a year (100,000 barrels per day) through this route. The pipeline capacity was estimated at five million tons.

Chanturia said that the final decision on the issue would be made at a meeting of AIOC’s shareholders at the end of April.

Chanturia said that AIOC’s shareholders will also discuss financing the renovation of the Baku-Supsa route.

"The cost could double to $600 million from the current $315 million if the capacity is increased,” Chanturia said.

Oil sources in Baku said experts from AIOC and Azerbaijan’s state oil company SOCAR would settle the technical and financial aspects of the project at the meeting–and would try to reach a final decision on the level of investment required.

The meeting would study various pipeline proposals including completely overhauling the existing pipeline running through Azerbaijan and Georgia–and building a new line–preparing precise cost estimates for each option.

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