ECONOMY

New refinery planned at Ceyhan pipe end

ANKARA – Turkey plans a new oil refinery at its southern port of Ceyhan, terminus of a twin pipeline from Iraq and another line from Baku that will carry Caspian crude, a Turkish energy official said yesterday. «There are plans to set up a refinery and a petrochemical plant at Ceyhan and Russia is interested in these projects,» the official, who asked not to be identified, told Reuters. The plan is likely to be discussed when Russian President Vladimir Putin visits Turkey next week for a gas pipeline inauguration, he said. «Russia also wants to take part in a project for storing gas under Tuz Golu (Salt Lake) in central Anatolia,» the official said. Italian Prime Minister Silvio Berlusconi and his Turkish counterpart Recep Tayyip Erdogan will also attend the ceremony in the Black Sea town of Samsun on Nov. 17. «The three leaders will also discuss some other projects that are of interest to their countries,» said the official, without giving further details. The ceremony will inaugurate the Blue Stream pipeline, which has carried gas to Turkey from Russia since 2003. The $3 billion, 1,250km pipeline stretches from southern Russian gas fields to the Turkish capital Ankara after passing under the Black Sea. It is jointly owned by Russian Gazprom and Italy’s Eni and has a capacity to carry 16 billion cubic meters (bcm) a year. Turkey buys gas from Russia, its top supplier, on two lines. Aside from the Blue Stream, a western route, opened in 1987, runs through the Balkans and can carry 14 bcm annually. Turkey has been in talks with Gazprom to reduce the price of its gas purchases but has had no success. It was not clear whether the leaders would take up the price issue in Samsun next week. Turkey has contracts to buy a total of 22 bcm from Russia in 2006, 8 bcm of it through Blue Stream and the rest via the western line. It has so far this year bought 2.123 bcm via Blue Stream, compared to 3.238 bcm in the whole of last year. Turkey, which also buys gas from Iran via a pipeline and from Algeria and Nigeria in liquefied form shipped in tankers, is expected to consume about 25 bcm this year, up from 22.2 bcm last year. It has gas purchase contracts totaling 35.766 bcm for 2006. The official said the Mediterranean port of Ceyhan will become an energy hub for nearly 200 million tons of crude with planned inputs from Russia, Iraq and the Caspian. An oil pipeline from Baku to the port will carry 1 million barrels per day of Caspian oil in an effort to bypass congested Turkish straits when it comes on stream toward the end of this year. Turkey is also pushing for a 1.4-million-bpd crude link from Samsun to Ceyhan to pump Russian oil to the Mediterranean.