ECONOMY

No more partners needed for Baku-Ceyhan pipeline, says BP

ISTANBUL (Reuters) – A pipeline project to carry Caspian oil from Azerbaijan to world markets would not need new partners in its sponsor group to secure financing, the project’s lead manager said yesterday. The $2.9 billion pipeline from the Azeri capital of Baku is expected to carry 1 million barrels per day of Caspian oil to Turkey’s Mediterranean port of Ceyhan from early 2005. «The ownership of the Baku-Ceyhan (pipeline) is now complete,» Michael Townsend of BP, the project’s leader, said on the sidelines of an energy conference in Istanbul. «It is actually very difficult to bring in further parties as investors to the pipeline; it is not impossible but it is very difficult,» he told reporters. The 1,730km (1,075-mile) pipeline, which will pass through Georgia, will be the first exit for Caspian oil to warm seas. About 30 percent of the project will be financed by a sponsor group led by BP and the rest will be financed by international lenders. Townsend said the World Bank, the International Finance Corporation and the European Bank for Reconstruction and Development were expected to provide finance. BP heads the project holding a 38.21-percent stake. Other companies in the sponsor group include Azeri state oil company Socar, Norway’s Statoil, the USA’s Unocal, Japan’s Itochu, Saudi Arabia’s Delta Hess, Italian Eni, and the French TotalFinaElf. Oil major TotalFinaElf was the latest entrant to the sponsor group, taking a 5-percent stake in early June. It has a development project in the offshore Kashagan field in Kazakhstan, the world’s biggest find in 30 years with estimated reserves of at least 10 billion barrels. «If TotalFinaElf or Eni delivers volumes later on from Kashagan field, where they both have interests, that would make the pipeline even more economic,» Townsend said. The project was long criticized as uneconomic, but it proceeded largely thanks to support from the US government, which backs projects that do not involve Iran. Construction is expected to start by early 2003 and to be finished by mid-2004. – On Panamaxes in the Pacific, Noble has fixed M/V «Doric Herald» 73,350 dwt, built 1995, delivery East Coast, India July 1-10, redelivery Far East, at USD 8,000 daily.