Georgia Azerbaijan Link Baku Ceyhan Pipeline

BEUK KASIK–Azerbaijan (Reuters)–Azeri and Georgian presidents linked parts of a 1 million barrels per day Baku-Ceyhan pipeline (BTC) on Saturday despite a new postponement in construction of its Georgian section.

The $3.6 billion BP-led pipeline will deliver oil from the BP-operated Azeri-Chirag-Guneshli oil fields in the Caspian Sea to the Mediterranean port of Ceyhan.

The pipeline–which crosses Azerbaijan–Georgia–and Turkey–is almost ready and due to be finished in March–with the first tanker expected to load in the second half of 2005.

The current delay in the construction of the Georgian part will not affect the first loading date–BTC Chief Executive Michael Townshend said. "The full completion of the section is postponed by several months–to maybe March 2005–because of a number of delays in Georgia," Townshend told Reuters.

"Such momen’s are natural for the fulfillment of a project of an international scale–but it will in no way affect our plans to load the first tanker with Azeri oil in the second half of 2005. On the whole–the construction of the Baku-Ceyhan pipeline will be completed in the first half of 2005."

In July–construction of the Georgian part of the pipeline was halted for two weeks for environmental review by the Georgian government. Once considered a stillborn project–the US-backed pipeline is designed to help producers of the oil-rich Caspian Sea reach international markets without going through Russia.

The BTC will pump around 200,000 bpd in 2005–600,000 bpd in 2006 and hit design capacity of 1 million bpd in 2008-9.

Besides BP–Baku-Ceyhan participants include Norway’s Statoil –Azeri state oil company SOCAR–US Unocal and Japan’s Itochu . BP-Azerbaijan President David Woodward told Reuters that the pipeline would work for at least 20 years and would become profitable in 2013-2014.

Azeri-Chirag-Guneshli extractable reserves are estimated at 5.4 billion barrels of oil. The bloc can be worked on until 2024.

SOCAR President Natik Iliyev told the ceremony that total Caspian Sea reserves amounted to 20 billion barrels of oil and 640 trillion cubic feet of gas–making the region the world’s 10th biggest by energy reserves. Georgian President Mikhail Saakashvili–who became president of the impoverished state last year after a ‘velvet’ revolution–said the pipeline had become another link in the Georgian-Azeri relations.

"This project will not solve all Georgia’s problems–of course–but it will allow it to be successfully integrated into the world community," Saakashvili said.

But a citizen of Georgia’s Khaletdin-mualim village–located on the border with Azerbaijan–where the pipeline was linked–said his hopes for the project had been dashed.

"We did not get any money from the pipeline crossing our village," said the man–who declined to be named. "Like before–we have serious problems with electricity–gas and we lost all hope that our life will become better."

But an inhabitant of an Azeri village of Beuk Kasik–Elmetdin Memedov–said he was happy to get compensation for the pipeline crossing his plot of land.


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