ECONOMY

Strategic BTC pipeline ready for opening

ANKARA- The Baku-Tbilisi-Ceyhan (BTC) pipeline, a $4 billion, US-backed project to supply oil to Western markets, will be officially inaugurated on Thursday with a high-profile ceremony in southern Turkey. The conduit will carry oil from the Caspian Sea fields, with the world’s third-largest reserves, to the Turkish port of Ceyhan, bypassing Russia’s energy web, as well as US foe Iran, and easing Western reliance on Middle East crude supplies. One of the longest in the world, it stretches over 1,774 kilometers (1,100 miles) from the Azeri capital Baku via Georgia to Ceyhan, the terminal on Turkey’s Mediterranean coast from where tankers will load the crude and carry it to Western countries. The first tanker already loaded crude from Ceyhan and headed to Italy on June 4 in a sort of a technical exercise that allowed the authorities to iron out any remaining details. The BTC’s longest stretch, 1,074 kilometers, runs on Turkish territory, while 440 kilometers are in Azerbaijan and 260 kilometers in Georgia. The pipeline is designed to transport up to 50 million tons of crude annually but it is not likely to operate on maximum capacity in the short term, experts say. Last month, Kazakhstan signed an agreement to join the project, committing an initial 7.5 million tons annually, with a pledge to raise the amount to 20 million tons in the longer term. The pipeline was built by an international consortium led by British oil giant BP, which holds 30.1 percent of its shares, followed by Azerbaijan’s public oil group Socar with a 25 percent stake. The other participants are: US company Unocal (8.9 percent), Norway’s Statoil (8.71 percent), Turkey’s TPAO (6.53 percent), Italy’s ENI (5.0 percent), France’s Total (5.0 percent), Japan’s Itochu and Inpex (3.4 and 2.5 percent respectively), and US firms ConocoPhillips and Amerada Hess (2.5 and 2.36 percent respectively). Apart from economic benefits, the pipeline is seen by the West as a project of geostrategic significance, loosening Russia’s longstanding grip over oil exports from the Caspian and isolating Iran, another oil producer. Despite widespread doubts over its commercial viability in the initial phases of planning, the United States threw its weight behind the route, lobbying hard for the exclusion of Iran, whose participation would have made the conduit both shorter and more profitable. Planning started in the early 1990s following the collapse of communism and construction began in 2000, cementing Western influence in a region which used to mark the Cold War divide between NATO and the Soviet Union. In a relief for Turkey, the route also avoids the Bosporus strait, where congestion and tanker accidents often endanger the environment and the safety of residential quarters on the banks of the narrow waterway, which passes through Istanbul, a city of 12 million. Mithat Rende, a senior Turkish diplomat specializing in energy issues, hailed the pipeline as «the most important part of the east-west energy corridor,» adding that Ceyhan will become in time «a real energy hub.»