ECONOMY

Moves on pipeline tender

ANKARA – Turkey will complete tender calls to supply equipment for a a pipeline on its soil to carry Caspian oil to world markets by the end of 2001 with construction to start on June 24, 2002, an energy official said. By end of this year, we will have made all tender calls. The results will be approved by sponsor group firms by May 15 and construction will start on June 24, 2002, Gokhan Bildaci, general manager of state pipeline company Botas told Reuters yesterday. So by May 2002, we will have clarified which contractor will do what, he added. The project envisages a 1,730 km (1,031 mile) pipeline from Caspian oil fields in Baku to the Ceyhan oil terminal on Turkey’s Mediterranean coast, via Tbilisi. The pipeline is to carry up to 1 million barrels per day of crude from 2005. Botas has already collected 56 bids from domestic and foreign firms for the engineering procurement phase and will soon announce the short list, Bildaci said. We have divided the pipeline into three parts. The first is the pumping station, the second is the Ceyhan terminal and the third is procurement of ‘long lead items’ such as pumps, valves, fiber optic cables, etc., said Bildaci, at the reins of Botas since Gokhan Yardim was removed from office. Botas has already advertised for bids for ‘long lead items’ as their procurement takes a long time, Bildaci said. We can give one and a half to two months to contractors for preparations and we need the same amount of time for evaluations. The same processes will be held in Azerbaijan and Georgia simultaneously, he said. The detailed engineering study, which will determine the exact route of the pipeline, will cost a total of $150 million. Detailed engineering studies will be carried out by US contractor Bechtel in Azerbaijan and Georgia and by a German consultancy firm ILF and its Turkish partners Yuksel Insaat and Temel Su in Turkey. BP is leading the sponsor group conducting the detailed engineering study and negotiates with potential partners in the whole project, whose price tag has been revised to $2.8-2.9 billion after basic engineering work completed in May. Western firms including Texaco, Total, FinaElf, Chevron and Eni have shown interest in the project as Azeri state company SOCAR aims to cut its stake in the sponsor group to 15 percent from 50 percent, Bildaci said. BP holds a 25.41-percent stake in the group. Other participants are US oil company Unocal with 7.48 percent, Norway’s Statoil with 6.37 percent, Turkish Petroleum (TPAO) with 5.02 percent, Japan’s Itochu with 2.92 percent, Britain’s Ramco Energy with 1.55 percent and Saudi-American Delta Hess with 1.25 percent. TPAO may like to increase its stake in the group. I think it will be very beneficial as the investment will be profitable and will pay off its costs in a short time. And it’s the only exit from the Caspian region to warm seas, Bildaci said. The revised cost of the pipeline project was in line with Botas’s cost estimates and Turkey is still operating within the limits of its $1.4-billion budget, Bildaci said.