TURKEY: Ceyhan oil pipeline is officially inaugurated in Ceyhan

Record ID: 661259

  • Title: TURKEY: Ceyhan oil pipeline is officially inaugurated in Ceyhan
  • Date: 14th July 2006
  • Summary: WIDE AUDIENCE
  • Embargoed: 29th July 2006 13:00
  • Keywords:
  • Location: Turkey
  • Country: Turkey
  • Topics: Domestic Politics,Energy
  • Reuters ID: LVA5OJ2FZ1FD7FL5HJB7JKRY53JP
  • Story Text: Turkey inaugurated on Thursday (July 13, 2006) a $4 billion US dollars pipeline carrying oil from the Caspian Sea to the Mediterranean, part of an energy corridor vital to both Western and Turkish strategic interests.
    The Baku-Tbilisi-Ceyhan (BTC) project, backed by the United States and which sidesteps major energy producer Russia, is also designed to reduce Western dependence on Middle East oil.
    Turkish, Azeri and Georgian heads of state were joined by ministers from around the world for a ceremony at the port of Ceyhan to mark the opening of the 1,770 km (1,106-mile) pipeline from Azerbaijan's Baku, which also goes to Georgia's Tbilisi.
    Azerbaijani President Ilham Aliev said: "This project is considered the biggest project in the world. The future of this world is linked to these kinds of projects on energy supplies. Everyone can understand that energy security is given significant contribution to the whole security of any nation."
    Oil giant BP, the main partner in the consortium running the pipeline, expects its capacity to reach 1 million barrels per day (bpd) by 2008, mainly on Azeri shipments. Last month Kazakhstan officially joined the venture.
    Georgian President Mikhael Saakashvili added: "These projects bring security, stability and the promise of a better future. Not only energy or independence or economic independence. This project is about independence, about real independence for all countries."
    Ceyhan, on the Mediterranean, is already the terminal for a pipeline from Iraq's Kirkuk fields and with a planned line from the Black Sea city of Samsun, it is expected to account for 8 percent of global crude trade at capacity.
    It also bypasses the shipping bottlenecks at western Turkey's Bosphorus Straits where winter crude shipments can be held up for weeks by poor weather and congestion.
    The pipeline loaded its first cargo in June, after delays to start-up of over a year, and trade sources said on Wednesday it will load 284,000 bpd in August, up from 213,000 bpd in July.
    The light Azeri crude is of the type favoured by refiners to make high quality transport fuels. The rising Azeri flow is changing the balance of the Mediterranean crude market, until now dominated by the heavier Russian Urals crude blend.
    The Baku-Ceyhan project is one of a series of oil and gas pipeline ventures which are set to increase Turkey's strategic importance to Europe as an energy corridor over the next decade, as well as meeting domestic energy demand.
    Europe has been especially keen to develop alternative supply sources since a dispute between Moscow and Kiev disrupted flows of Russian gas through Ukraine in January.
    Turkey has attracted growing interest from foreign investors looking to benefit from its rapidly growing market, bolstered by the start of its membership talks with the European Union.
    NATO-member Turkey also plays an important role in security terms because of its borders with neighbours including Iraq, Iran and Syria. Its growing role as a conduit of energy adds another dimension to its strategic importance.
    Among other plans for the energy corridor are the pipeline from the Black Sea to Ceyhan and two gas pipelines from Russia, which wants to extend the Blue Stream pipeline to Israel.
    Turkey also receives gas via a pipeline from Iran, while the Shakh-Deniz project will bring gas from the Caspian to Turkey from around the end of this year. In phase two of this project, this gas will also be transported to Europe.
    The President of Turkey, Ahmet Necdet Sezer, said: "Together with this pipeline the flow of Caspian oil to the Mediterranean Sea and to the world markets safely in an economic way will increase cooperation and security in the region."
    Ankara envisages Ceyhan as an energy hub and fuel retailer Petrol Ofisi, in which Austria's OMV has a 34 percent stake, is planning to build a refinery there with a 10-million tonne (some 20,000 bpd) capacity.
    Turkey is forecast to earn some $300 million annually from the Baku-Ceyhan pipeline.
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