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BTC oil pipeline inaugurated in Turkey - UPDATED

13 July 2006 [17:55] - TODAY.AZ
The presidents of Turkey, Azerbaijan and Georgia formally opened a pipeline Thursday designed to bypass Russia and bring Caspian oil to Europe, a route that President Bush said would bolster global energy security.

18:55

The United States staunchly supported the 1,100-mile, $3.9 billion pipeline as part of a strategy to tap sources of crude outside of the Middle East and draw the Caspian states away from Russia and closer to the West, the Associated Press reports.

In Brussels, EU spokesman Ferran Tarradellas Espuny said the pipeline "will improve our security of supply and our diversification goals .... Diversification of origin and routes has been identified as a priority in the European energy policy."

Oil began flowing from the Turkish port of Ceyhan last month and some 430,000 barrels of oil are flowing each day, said Norman Rodda, construction manager for the Turkish section of the pipeline.

Officials at BP, the pipeline consortium's main participant and the largest foreign investor in Azerbaijan's oil sector, said they expected pumping to increase to 1 million barrels per day by 2008. Kazakhstan recently said it would begin pumping some oil through the pipeline, and Azerbaijani production is expected to be boosted to reach that goal.

The new oil is not expected to have a major impact on already sky-high oil prices, but some experts said the crude may have helped prices from going even higher.

There is already talk of building new Caspian pipelines to increase the flow.

"Together those lines are helping to create a new trade route, which is helping to meet the world's growing need for energy and reduce the growing sense of insecurity which is distorting the world's energy scene," said Lord Browne, the chief executive of BP PLC.

On Thursday, Turkish President Ahmet Necdet Sezer, Georgian President Mikhail Saakashvili and Azerbaijani President Ilham Aliyev joined pieces of pipe on a commemorative model of the pipeline to formally open the route.

"There were some destructive forces" that opposed the pipeline, Aliyev said. "We want this oil to bring peace, development and prosperity."

"The BTC project is crucial to creating a reliable energy corridor between producer and consumer countries," Turkish Prime Minister Tayyip Erdogan told the opening ceremony, Reuters informs.

"This is a historic moment, it changes the energy map of the world," BP Chief Executive John Browne said. "This project is an achievement in overcoming doubts. We have a daily challenge of operating the pipeline safely for people and the environment."

Russia strongly opposed the pipeline and instead pressed for Caspian oil to continue going through its territory. Many oil officials were against building an expensive pipeline that would need to snake through Azerbaijan, the mountains of Georgia and northern Turkey, and favored the cheaper Russian option.

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02:19

According to United Press International, Presidents of Azerbaijan, Georgia and Turkey and other dignitaries met in Istanbul for the kick off event, hailing the 1,700 kilometer pipeline, as a boon for Western energy security and an important step in Turkish and Caspian development. A ceremony at the pipeline`s end in the Mediterranean port city of Ceyhan is scheduled for Thursday.

'We well understand the significance of the implementation of the BTC project and conduct delicate energy diplomacy in this direction,' Turkish Minister of Energy and Natural Resources Hilmi Guler told the Turkish media.

'The diplomacy in the sphere of energy resources is an important element of Ankara`s foreign policy,' Guler continued.

Turkey, already crisscrossed by several oil and gas pipelines, is focusing on becoming an energy corridor for the world.

'The BTC pipeline constitutes a major milestone in the achievement of the `East-West Energy Corridor` (plan) with a capacity of 1 million barrels per day,' according to a Turkish Ministry of Foreign Affairs document obtained by United Press International.

The proposed corridor, developed in cooperation with Azerbaijan, Georgia and the United States, 'aims at transporting Caucasian and central Asian oil as well as natural gas to western markets through safe alternative routes (to the Turkish Straits),' the ministry document said.

In addition to BTC, other energy corridor projects on the discussion table include the Shah Deniz natural gas pipeline, also called the Baku-Tbilisi-Erzurum pipeline, the Trans-Caspian natural gas pipeline, the Samsun-Ceyhan bypass oil pipeline project and the Kirkuk-Ceyhan oil pipeline, according to the document.

Turkey anticipates that the combined capabilities of BTC, Kirkuk-Ceyhan and Samsun-Ceyhan, as well as the oil transported through the Turkish Straits will provide 6 to 7 percent of the global oil supply via Turkey transit by 2012, the ministry said.

The $4 billion BTC pipeline starts at the Sangachal Terminal, about an hour south of the Azerbaijani capital of Baku. It makes its way northwest to the Georgian capital of Tbilisi, and then turns south to Ceyhan and the Mediterranean Sea.

From there, the oil will travel to Europe through Greece and Italy, or on an alternate route north to Austria via Bulgaria, Romania and Hungary.

There is also talk of bringing the oil south to Israel, either via pipeline or tanker. The Israeli daily newspaper Ma'ariv reported this week that Azerbaijani oil has already been arriving at the country's Oil Refineries Ltd. for almost two weeks, but spokesmen for the Israeli Ministry of National Infrastructures and Oil Refineries Ltd. declined to confirm or deny the reports.

But even if the oil is not yet flowing, officials in Azerbaijan, Turkey and Israel have all expressed great interest in making that happen. Israeli Minister of National Infrastructures Benjamin Ben-Eliezer is in Turkey for the celebrations, and will participate in the Istanbul ceremony, the ministry said. And during a visit to Baku in June, Azerbaijani President Ilham Aliyev identified Israel as a potential energy partner.

Meanwhile, BTC is also being hailed in the West as an alternative to Russian and Middle Eastern oil and an important development in the field of energy security.

'Our goal is increasing the efficiency of the European energy market, which is not working well at the moment. Commercial competition is needed,' U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs Matthew Bryza told journalists in Turkey on Tuesday.

'We don`t want a confrontation with Russia on the energy issue, but we would like to have competition, which would be in the interests of both sides, contrary to the current situation,' Bryza continued, according to a report by the Turkish Daily News.

U.S. Secretary of State Condoleezza Rice, who will be on hand for the festivities, has also expressed support for loosening Russia`s grip on the energy market.

'It`s quite clear that one of the concerns is that there could be a monopoly of supply from one source only, from Russia,' Rice told reporters on a visit to Athens this past spring.

Though hopes are high for the pipeline's potential, it also faces serious and largely unaddressed security risks.

'The BTC runs through difficult and dangerous territory,' Alexandros Petersen wrote this week for Eurasianet.org. 'Not only does the route pass through forbidding mountains and remote locales, including over 14 seismic faults, but it runs dangerously close to the region`s frozen conflicts and hotspots (such as) ... Armenian enclaves in southern Georgia, the restive Kurdish regions of southeastern Turkey (and others).'

'The region has experienced an episode of sabotage as recently as January, when suspicious explosions in North Ossetia cut off gas and electricity supplies to Georgia,' Petersen continued.

The pipeline also faces local threats, though landowners along BTC's route have been reimbursed by British Petroleum. 'Locals staged frequent blockages during construction, and illegal tapping attempts were found even before oil began to flow in May 2005,' Petersen wrote.

/monstersandcritics.com/

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