Turkey US to Talk Nuclear Power Caspian Oil

ANKARA (Reuters)–US Energy Secretary Bill Richardson arrived in Turkey on Monday to discuss carrying Caspian hydrocarbon reserves to Western markets through Turkey–and Turkish plans to build a nuclear power plant.

Turkey’s Energy Minister Cumhur Ersumer said he would meet Richardson in Istanbul on Tuesday for talks on proposed pipelines to carry Azeri oil and Turkmen gas to Turkey.

"We will talk about the Caspian oil and gas projects involving Turkey–for which the United States has already expressed open support," Ersumer told reporters in Ankara.

Richardson is also scheduled to visit Azerbaijan and Turkmen’stan later in the week.

Turkey has proposed building a 1,081 miles pipeline from the Azeri capital Baku to its Ceyhan oil terminal on the Mediterranean to bypass its narrow straits because of already heavy traffic there.

Ersumer said the fighting in Dagestan in the North Caucasus region showed how relatively secure the Baku-Ceyhan pipeline would be.

Turkish energy officials said the timing of Richardson’s visit and a decision by the government to promote the Baku-Ceyhan project among US finance circles later this month were not a coincidence.

"Two week before Richardson’s visit–the (US) Overseas Private Investment Corporation (OPIC) suggested in a meeting that (Turkish state pipeline company) Botas will promote the project to US financiers," said one senior oil official.

"So the visit will raise Baku-Ceyhan’s profile in the US finance market," he said.

The Baku-Ceyhan proposal is being taken up by the Azeri International Operating Consortium (AIOC)–which began producing oil in the Caspian region in November–1997–under an $8 billion project.

AIOC–led by BP Amoco and Norway’s Statoil–is expected to propose its recommendation to the Azeri government on the main export route from among three options–one of them being the Baku-Ceyhan pipeline.

The other options are pipelines from Baku to Russia’s Novorossiisk and Georgia’s Supsa–which is the only outlet presently used by the AIOC.

Under several draft agreemen’s between Turkey–Azerbaijan and the AIOC–Botas is proposed as the contractor of the pipeline–which will carry up to an annual 60 million tons.

Turkey has raised the cost of the pipeline to $2.7 billion from $2.4 billion after reviews on the capacity and equipment to be used on the pipeline.

The figure compares to $3.7 billion put by the AIOC–which has opposed the project–saying even its peak output of 800,000 barrels per day (bpd) expected after 2007 could not fill the one-million bpd pipeline.

Despite AIOC concerns–the United States and Azerbaijan back the Baku-Ceyhan and other non-Russian pipeline projects to lessen Russian and Iranian energy influence in the region.

Turkey says oil to be produced in other Caspian development projects including that from vast Kazakh reserves would be sufficient to justify the Baku-Ceyhan pipeline’s cost.

Also on the agenda is a project to carry up to 30 billion cubic meters of Turkmen gas a year across the Caspian sea to Turkey through a pipeline. A US consortium has undertaken the construction of the 1,250-mile pipeline.

Ersumer said Turkey would also discuss with Richardson "energy projects involving American companies."

Included in such projects is Turkey’s first nuclear power plant–in which a US Westinghouse-led consortium was among the three bidders with two options worth $2.4 and $2.96 billion respectively for the tender which closed in late 1997.

"We will have to make a decision and award the tender by October 15–otherwise Turkey’s credibility in nuclear power plants will be harmed," Ersumer said.

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