US Sees Baku Ceyhan Accord in Coming Months

ISTANBUL (Reuters)–A US energy official said on Tuesday he believed an accord would be reached in the coming months on issues hindering a proposed pipeline to carry Caspian oil to Turkey.

US adviser on Caspian energy issues Richard Morningstar said he saw progress in efforts to resolve disagreemen’s on the pipeline between Baku and Turkey’s Mediterranean port at Ceyhan.

"I believe very strongly that there will be an agreement with respect to Baku-Ceyhan in the coming months," Morningstar told a news conference during his last visit to the region in his capacity as adviser.

Morningstar–who is set to take up the post of US ambassador to the European Union–is to be replaced as Caspian adviser by John Wolf who accompanied him on the trip.

In April–Turkey and an Azeri working group–which includes international oil firms–signed an accord to speed up talks on Baku-Ceyhan and clear up outstanding issues within three months.

The Azeri working group is pressing for Turkey to sweeten the deal with a government guarantee on the cost and a turnkey guarantee. It also wants to lower the estimated $2.4 billion construction cost of the 1,070-mile pipeline.

"A year ago the partners weren’t even talking about these things. Today they are actively negotiating to resolve these issues," Morningstar said. Earlier in the day he held talks with Turkish Energy Minister Cumhur Ersumer.

Morningstar reiterated US commitment to Baku-Ceyhan and a planned pipeline to carry gas from Turkmen’stan through the Caspian Sea–Azerbaijan and Georgia to Turkey.

"Our support for the Baku-Ceyhan pipeline and for the Transcaspian gas pipeline is unwavering," he said.

The United States aims to secure multiple routes to the West for Caspian oil to minimize the influence of Russia and Iran.

Morningstar repeated US opposition to a pipeline through Iran because of "political difficulties" and because: "It simply makes no sense from a commercial standpoint."


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