Construction starts on Baku-Ceyhan pipeline in Turkey

ANKARA (Reuters) – Turkey started construction yesterday on a pipeline set to carry 1 million barrels a day of Caspian crude oil from the Azeri capital of Baku to Turkey’s southern Mediterranean port of Ceyhan. Construction of the Turkish section began with a ceremony in Ceyhan attended by Turkish Energy Minister Zeki Cakan, the head of state pipeline company Botas, Gokhan Bildaci, and Steven Mann, US presidential adviser on Caspian energy projects. The pipeline was proposed by Turkey in the early 1990s to bypass its already busy Bosporus Strait, the only outlet at present for Russian and any other oil transported via the Black Sea. The project has received strong support from the US government as it would be the first route in the region to bypass both Russia and Iran. The pipeline will stretch 1,730 kilometers (1,075 miles) from Baku to Ceyhan through Georgia’s capital Tbilisi and has a price tag of about $2.95 billion. The construction phase is expected to last 32 months and oil should begin flowing to Ceyhan in May 2005, Turkish energy officials have said. Botas, the contractor for the Turkish section of the pipeline, has divided the project into six parts and signed agreements with contractor companies on September 20. The companies building the pipeline’s Turkish section include Dutch Nacap Nederland BV, Germany’s Haustadt &Timmermann and Max Streicher, and India’s Punj Lloyd. The pipeline project is led by BP, which has a 32.6-percent stake in the sponsor group. Other companies in the sponsor group include Azeri state oil company SOCAR (25 percent), Unocal (8.9 percent), Statoil (8.71 percent), TPAO (6.53 percent), ENI (5 percent), TotalFinaElf (5 percent), Itochu (3.4 percent), INPEX (2.5 percent) and Delta Hess (2.36 percent).

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