Blast Rocks Baku-Ceyhan Pipeline

ANKARA/BAKU (Reuters)–An explosion on the Baku-Tbilisi-Ceyhan (BTC) pipeline on Tuesday night in eastern Turkey has halted the oil flow along the one million barrels per day pipeline, a senior Turkish Energy Ministry official said.

"The fire is under control, but we need 24 hours from now to extinguish it. After the fire is put out, we can look at the damage and say when it will be possible to reopen the line," the source said speaking on condition of anonymity.

A spokeswoman for British Petroleum, a shareholder in the pipeline, said oil flows were halted after a fire damaged a valve on a section in eastern Turkey, but exports from the Ceyhan port terminal continued from storage.

Brent crude oil futures rose a dollar to $118.70 a barrel after the stoppage, after sharp losses this week.

The spokeswoman also said BP and its partners continued to produce crude from their Azeri fields for stockpiling until flows can resume.

"The incident didn’t stop oil production on the Caspian and exports from Ceyhan are going in line with the schedule. (Turkish state firm) Botas is taking all necessary measures to put the fire out," she added.

Storage facilities at Ceyhan can hold 7.5 million barrels of oil, or enough to fill seven large tankers.

The pipeline, one of the world’s biggest, pumps over one million barrels per day from fields in the Azeri sector of the Caspian Sea to the Turkish Mediterranean coast, covering over one percent of global oil supply.

The BTC is an alternative to the Baku-Novorossiisk pipeline that takes Azeri oil to Russia, from where it is sold on to Europe.
The cause of the explosion was not immediately known.

"Whether it is sabotage or some other reason, we still don’t have that information. At this point all our efforts have been focused on putting out the fire completely," said the Energy Ministry official.
An explosion on a pipeline between Turkey and Iran halted gas exports for five days in March. Responsibility for that blast was claimed by the separatist Kurdistan Workers Party (PKK) guerrilla group.

A news agency close to the PKK said there were claims that the latest blast could have been caused by the separatist rebels.
The lion’s share of the pipeline’s oil comes from the Azeri-Chirag-Guneshli offshore project in the Caspian Sea, before being routed through Georgia and Turkey.

BP owns 30.1 percent of the BTC, while Socar holds 25 percent. Other shareholders include U.S. Chevron and ConocoPhillips, Norway’s StatoilHydro, Italy’s ENI and France’s Total.

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