Pipeline section building begins

TETRI ZKARO, Georgia – Oil major BP yesterday started to build the Georgian stretch of a huge pipeline from the Caspian Sea to Turkey after calming local ecologists and promising protection from US defense firms. The $3 billion, 1,750 km Baku-Ceyhan pipeline will ship up to 1 million barrels a day from Azerbaijan’s giant oil field to the Turkish Mediterranean port of Ceyhan via Georgia from 2005. The BP-led group has already started building the line in Azerbaijan and Turkey, but the Georgian work was postponed as ecologists said the line would damage the Caucasus mountains. BP has promised to apply the toughest ecological standards while analysts have said the Georgian government should find ways to calm protesters as Baku-Ceyhan will represent a major source of budget revenues for the impoverished ex-Soviet state. «We are happy that our dreams have finally come true,» Georgian President Eduard Shevardnadze told reporters at the inauguration ceremony in the south of the country. The head of Azeri state oil firm SOCAR, Natik Aliyev, said he believed ecological concerns were now in the past. «Problems existed, but BP as an operator has taken a few additional measures to strengthen the most dangerous stretches, especially in Georgia,» he said. The head of Georgian state oil firm GIOC, Georgy Chanturia, said his firm was in talks with US defense firms to guarantee the security of the pipeline, as it passes near several regions of ethnic conflict. «There will be an unprecedented security system,» Chanturia said. The US-backed pipeline, masterminded to reduce Russia’s dominance in transporting the Caspian’s oil riches to the West, still faces other obstacles, including a fresh report from Amnesty International calling on Britain to withhold any public funding for the project. The humanitarian group says the line could displace tens of thousands in Turkey’s impoverished eastern provinces. The Turkish Foreign Ministry on Thursday denied that. Turkey says the project would earn it $200-300 million a year in transit fees – valuable income for the frail economy recovering from its deepest economic slump since 1945. It says the pipeline would also minimize damage to the environment by reducing the number of tankers carrying Central Asian oil to western markets through the narrow Black Sea Bosphorus strait, the scene of several oil spillages. BP holds 30.1 percent of Baku-Ceyhan. Other participants include SOCAR with 25 percent, US group Unocal with 8.9 percent, Norway’s Statoil with 8.71 percent and Turkish TPAO with 6.53 percent. Italy’s ENI and Total each hold 5.0 percent, Japan’s Itochu has 3.4 percent, Japan’s INPEX and US ConocoPhillips have 2.5 percent each and Saudi Arabia’s Delta Hess owns 2.36 percent.