Baku-Ceyhan oil pipeline to be financed by BP-led international syndicate
ANKARA – A sponsor group led by BP has agreed on a plan to finance a pipeline project to carry 1 million barrels a day of Caspian crude oil to Turkey’s southern coast, a Turkish Energy Ministry official said on Tuesday. The pipeline will stretch 1,730 km (1,075 miles) from the Azeri capital Baku to the Mediterranean Turkish port of Ceyhan through Georgia’s capital Tbilisi and has a price tag of about $2.9 billion. «Between 20-30 percent of the cost will be financed by the sponsor group companies in cash,» said a senior energy ministry official, who declined to be identified. «The rest will be borrowed from international finance institutions, export credit agencies and commercial banks,» he told Reuters. The US-backed pipeline project was masterminded by Turkey in the early 1990s to bypass its already busy Bosporus straits, the only outlet at present for Russian and any other oil transported via the Black Sea. The US Eximbank, Japan Eximbank, the International Finance Corporation (IFC) and the European Bank for Restructuring and Development (EBRD) are among those interested in providing financing for the project, the official said. «Even if there are delays in financial closure, the sponsors are determined to give notice to proceed in June,» he said. The project’s engineering studies will pave the way for construction, expected to start in June and estimated to last 32 months. The project is sponsored by a group of international oil majors led by BP, with a 25.41 percent. Other members are Azeri national oil company SOCAR with 45 percent, US Unocal 7.48 percent, Norway’s Statoil 6.37 percent, Turkish Petroleum (TPAO) 5.02 percent, Italy’s Eni 5 percent, Japan’s Itochu 2.92 percent, Britain’s Ramco 1.55 percent and Saudi Delta Hess 1.25 percent. The cash budget measures actual cash inflows and outflows from treasury accounts but does not include non-cash transfers that appear on the full consolidated budget, which emerges later.
