ALMATY – Western oil majors active in Kazakhstan say the Baku-Ceyhan pipeline, once dismissed as too costly, is looking more and more viable as an export route for the Caspian Sea’s potential huge oil reserves. At present, there is a surplus of pipeline capacity available for moving oil from giant oil fields in Kazakhstan, some of which have just begun to be exploited. But the oil firms say this will not last forever, meaning the Baku-Ceyhan could one day be a vital means of easing an expected glut of Caspian oil at Black Sea ports and getting it to the Mediterranean coast. «If you want to ship your crude through Baku-Ceyhan in 15 years, you have to commit volumes or at least support the project today,» said an official at a Kazakhstan-based international oil major. The $2.9 billion BP-led Baku-Ceyhan project would be able to ship up to 1 million barrels per day of crude by 2005 from Azerbaijan and other Caspian producers. Despite having strong support from the USA, the project has long been considered pie-in-the-sky, as investors lack crude volumes to fill it. The situation changed last year after more Western firms, including those working in Kazakhstan, joined the project and Russian majors Lukoil and Yukos expressed interest, following the improvement of US-Russian relations after the September 11 attacks on US cities. Kazakhstan and nine Western oil firms are currently working on a US-sponsored study of crude routes from Kazakhstan to Baku through the Caspian, which experts believe contains oil reserves roughly equivalent to those in the North Sea. «Baku-Ceyhan still remains very expensive, but it is also a rarity in regional pipeline projects, as it is not controlled by Russia or Iran and will have transparent rules,» said a source in a Western oil major. He said Azerbaijan wanted to secure crude volume commitments from firms operating in Kazakhstan by the end of 2002, although many of them would prefer to wait until they started producing big volumes of crude on the Caspian shelf. Bypassing the Black Sea Kazakhstan plans to produce 45 million tons of crude this year, of which up to 35 million tons would be exported to Europe and the countries of the former Soviet Union. The country plans to triple its output and exports over the next 15 years. At present, all exports go through Russia via the Atyrau-Samara pipeline, which pumps up to 15 million tons of crude a year into Russia’s state pipeline monopoly Transneft system, or through the newly built Caspian Pipeline Consortium (CPC) link. CPC, operated by a Western consortium, runs from the giant Kazakh Tengiz field, operated by ChevronTexaco, to the Russian port of Novorossiisk and has a capacity of 28 million tons, which could be gradually raised to 67 million tons. «The CPC project will, for the next five to eight years, decide the question of the transport of Kazakh oil, including early production from the Caspian Sea shelf,» Timur Kulibayev, head of the state oil and gas transportation firm TNG said after CPC’s launch last year. An Agip-led consortium developing Kazakhstan’s first offshore field, Kashagan, is aiming to produce its first oil by 2005. But as Kashagan is believed to be the biggest new field since Alaska’s Prudhoe Bay, Kazakhstan needs new export routes. The government has also said it might announce new tenders for offshore oil and gas blocks close to Kashagan this year. «By the time Kashagan becomes fully operational, the Black Sea is likely to be heavily overloaded with Russian and CPC crude. Baku-Ceyhan would be a bypass of the Black Sea with its Turkish straits,» a source in another Western oil major said. Ankara strongly supports Baku-Ceyhan and has repeatedly voiced concerns that the planned large shipments of Caspian crude through the Turkish straits might congest the already busy waterway and endanger its ecology. An industry official said it was unlikely that Kazakhstan would build a link from its fields to Baku-Ceyhan under the Caspian Sea. «The working group studying possible routes is mainly focused on tanker deliveries from (the Kazakh Caspian port of) Aktau to Baku,» he said.