TODAY.AZ / Business

Chevron JV to start Baku-Ceyhan exports in mid-2007

29 June 2006 [18:59] - TODAY.AZ
A Chevron-led venture developing Kazakhstan's giant Tengiz field will start exporting oil via the Baku-Ceyhan pipeline in mid-2007, Azerbaijan's Deputy Transport Minister Musa Panakhov said on Thursday.

"TengizChevroil will begin exporting oil via Baku-Ceyhan after the second quarter of 2007," Panakhov told reporters. "The joint venture plans to transport 5 million tonnes a year (around 100,000 barrels per day) via the route."

Previously an official from the Kazakh oil sector had said exports would start at 3.5 million tonnes and rise later, Reuters reports.

Chevron owns 8.9 percent of the Baku-Ceyhan pipeline, which is led by Britain's BP Plc and is expected to pump more than 50 million tonnes a year from the Caspian to Ceyhan, on Turkey's Mediterranean coast, by the end of this decade.

The 1,770 km (1,100 mile) pipeline allows crude from the landlocked Caspian Sea to bypass both Russian pipelines and the congested Turkish straits.

Tengiz is currently sending 12-13 million tonnes a year through another pipeline in which Chevron is a 15 percent shareholder, the Caspian Pipeline Consortium (CPC), a link that runs to Russia's Black Sea port of Novorossiisk.

But Tengiz is set to double output to an annual rate of 26 million tonnes at the end of 2006 or the start of 2007, which would take up the bulk of the 35 million tonne capacity of the CPC pipeline.

Although the CPC consortium wants to expand capacity to 67 million tonnes to cope with growing volumes, Russia -- the top shareholder in CPC, which runs across its territory -- has resisted the move as it would put further pressure on the Turkish Bosphorus straits.

A Chevron executive headed the consortium until April, having battled for years for the expansion. He was replaced by a Russian official, Vladimir Razdukhov, who has said he was also in favour of expansion.

Russia, a 24 percent shareholder in CPC, has still not given final backing to the plan, despite Razdukhov's appointment.

The other Tengiz shareholders are ExxonMobil with 25 percent, Kazakh state firm KazMunaiGas with 20 percent and a joint venture between BP and LUKOIL with 5 percent.

The field's recoverable reserves amount to around 1.3 billion tonnes of oil.



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