Final Agreements For Baku-Ceyhan Pipeline To Be Signed
Turkish Energy Minister Cumhur Ersumer announced on October 8th that four final agreements concerning a U.S.-favored pipeline to carry Caspian crude oil to Turkey would be signed in Ankara on October 19th. The agreements will include host country, intergovernmental, turnkey and guarantee arrangements for the Baku-Ceyhan pipeline. The $2.4 billion project to transport crude from Azerbaijan to Turkey, bypassing Iran and Russia, is making headway after the Azeri state oil company SOCAR announced on October 2nd that the country has formed a group of foreign sponsors to support the project. Once an agreement has been reached between SOCAR and a BP Amoco-led consortium, bidding on the project will be opened to Azeri and Georgian contractors, and foreign bank credit will be sought for construction costs.
The pipeline, which will run through Georgia to the Turkish port of Ceyhan, is expected to transport 17 million tonnes of oil a year by the end of 2004, when construction on the project is slated for completion. Azerbaijan anticipates that the Azerbaijan International Operating Co. (AIOC) will be the main supplier of crude to the pipeline, with AIOC production expected to reach 450,000 b/d.