Baku–Tbilisi–Ceyhan pipeline

Baku–Tbilisi–Ceyhan pipeline

Map of Baku–Tbilisi–Ceyhan pipeline
Location
Country Azerbaijan, Georgia, Turkey
General direction east–south-west
From Baku (Sangachal Terminal), Azerbaijan
Passes through Tbilisi, Erzurum, Sarız
To Ceyhan, Turkey
Runs alongside South Caucasus Pipeline
General information
Type oil
Partners BP, SOCAR, Chevron, Statoil, TPAO, Eni, Total S.A., Itochu, Inpex, ConocoPhillips, Hess Corporation
Operator BP
Commissioned 2006
Technical information
Length 1,768 km (1,099 mi)
Maximum discharge 1 million barrels (160,000 m3) of oil per day

The Baku–Tbilisi–Ceyhan pipeline is a 1,768 kilometres (1,099 mi) long crude oil pipeline from the Azeri-Chirag-Guneshli oil field in the Caspian Sea to the Mediterranean Sea. It connects Baku, the capital of Azerbaijan; Tbilisi, the capital of Georgia; and Ceyhan, a port on the south-eastern Mediterranean coast of Turkey, hence its name. It is the second longest oil pipeline in the former Soviet Union after the Druzhba pipeline. The first oil that was pumped from the Baku end of the pipeline on 10 May 2005 reached Ceyhan on 28 May 2006.[1][2]

Contents

History

Planning

The Caspian Sea lies above one of the world's largest groups of oil and gas fields. As the Caspian Sea is landlocked, transporting oil to Western markets is complicated. During Soviet times, all transportation routes from the Caspian region were built through Russia. The collapse of the Soviet Union inspired a search for new routes. Russia first insisted that the new pipeline should pass through Russian territory, then declined to participate.[3][4]

In the spring of 1992, the Turkish Prime Minister Süleyman Demirel proposed to Central Asian countries and Azerbaijan, that the pipeline run through Turkey. The first document on the construction of the Baku–Tbilisi–Ceyhan pipeline was signed between Azerbaijan and Turkey on 9 March 1993 in Ankara.[5] The Turkish route meant a pipeline from Azerbaijan running through either Georgia or Armenia. However, the route through Armenia was politically impossible due to the unresolved war between Armenia and Azerbaijan over the status of Nagorno-Karabakh. This left the circuitous Azerbaijan-Georgia-Turkey route, although it was longer and more expensive to build than the other options.[6]

The BTC pipeline project gained momentum following the Ankara Declaration, adopted on 29 October 1998 by President of Azerbaijan Heydar Aliyev, President of Georgia Eduard Shevardnadze, President of Kazakhstan Nursultan Nazarbayev, President of Turkey Süleyman Demirel, and President of Uzbekistan Islam Karimov. The declaration was witnessed by the United States Secretary of Energy Bill Richardson, who expressed strong support for the BTC pipeline. The intergovernmental agreement in support of the BTC pipeline was signed by Azerbaijan, Georgia, and Turkey on 18 November 1999, during a meeting of the Organization for Security and Cooperation in Europe (OSCE) in Istanbul, Turkey.[6]

Construction

The Baku-Tbilisi-Ceyhan Pipeline Company (BTC Co.) was established in London on 1 August 2002.[7] The ceremony launching construction of the pipeline was held on 18 September 2002.[8] Construction began in April 2003 and was completed in 2005. The Azerbaijan section was constructed by Consolidated Contractors International of Greece, and Georgia's section was constructed by a joint venture of France’s Spie Capag and UK Petrofac International. The Turkish section was constructed by BOTAŞ. Bechtel was the main contractor for engineering, procurement and construction.[7]

Inauguration

On 25 May 2005, the pipeline was inaugurated at the Sangachal Terminal by President Ilham Aliyev of the Azerbaijan Republic, President Mikhail Saakashvili of Georgia and President Ahmet Sezer of Turkey, joined by President Nursaltan Nazarbayev of Kazakhstan, as well as United States Secretary of Energy Samuel Bodman.[9] The inauguration of the Georgian section of the pipeline was hosted by President Mikheil Saakashvili at the BTC pumping station near Gardabani on 12 October 2005.[10] The inauguration ceremony at the Ceyhan terminal was held on 13 July 2006.[11]

Pumping began on 10 May 2005 and reached Ceyhan in 28 May 2006.[1] The first oil was loaded at the Ceyhan Marine Terminal (Haydar Aliyev Terminal) onto a tanker named British Hawthorn.[12] The tanker sailed away from the port on 4 June 2006 with about 600,000 barrels (95,000 m3) of crude oil.[13]

Description

Route

The 1,768 kilometres (1,099 mi) long pipeline starts at the Sangachal Terminal near Baku in Azerbaijan, crosses Azerbaijan, Georgia and Turkey and terminates at the Ceyhan Marine Terminal (Haydar Aliyev Terminal) on the south-eastern Mediterranean coast of Turkey. 443 kilometres (275 mi) of the pipeline lie in Azerbaijan, 249 kilometres (155 mi) in Georgia and 1,076 kilometres (669 mi) in Turkey. It crosses several mountain ranges at altitudes to 2,830 metres (9,300 ft).[14] It also traverses 3,000 roads, railways, and utility lines—both overground and underground—as well as 1,500 watercourses of up to 500 metres (1,600 ft) wide (in the case of the Ceyhan River in Turkey).[15] The pipeline occupies a corridor eight meters wide, and is buried along its entire length at a depth of no less than one meter.[16] The BTC pipeline runs parallel to the South Caucasus Gas Pipeline, which transports natural gas from the Sangachal Terminal to Erzurum in Turkey.[14] From Sarız to Ceyhan, the Samsun–Ceyhan oil pipeline will be laid parallel to the BTC pipeline.[17]

Technical features

The pipeline has a projected lifespan of 40 years, and when working at normal capacity, it transports 1 million barrels per day (160×10^3 m3/d). It needs 10 million barrels (1.6×10^6 m3) of oil to fill the pipeline.[1] Oil flows through the pipeline at the speed of 2 metres (6.6 ft) per second.[15] There are eight pump stations through the pipeline route (two in Azerbaijan, two in Georgia, four in Turkey). The project includes also the Ceyhan Marine Terminal (officially the Haydar Aliyev Terminal, named after the Azerbaijani late president Heydar Aliyev), three intermediate pigging stations, one pressure reduction station, and 101 small block valves.[14] It was constructed from 150,000 individual joints of line pipe, each measuring 12 metres (39 ft) in length.[15] This corresponds to a total weight of 655,000 short tons (594,000 t).[15] The pipeline is 1,070 millimetres (42 in) diameter for most of its length, narrowing to 865 millimetres (34.1 in) diameter as it nears Ceyhan.[18]

Cost and financing

The pipeline cost US$3.9 billion.[19] The construction created 10,000 short-term jobs and the operation of pipeline requires 1,000 long-term employees across a 40 year period.[16] 70% of BTC costs are being funded by third parties, including the World Bank's International Finance Corporation, the European Bank for Reconstruction and Development, export credit agencies of seven countries and a syndicate of 15 commercial banks.[14]

Source of supply

The BTC pipeline is supplied by oil from Azerbaijan's Azeri-Chirag-Guneshli oil field in the Caspian Sea via the Sangachal Terminal. This pipeline may also transport oil from Kazakhstan's Kashagan oil field as well as from other oil fields in Central Asia.[3] The government of Kazakhstan announced that it would build a trans-Caspian oil pipeline from the Kazakhstani port of Aktau to Baku, but because of the opposition from both Russia and Iran, it started to transport oil to the BTC pipeline by tankers across the Caspian Sea.[2]

Possible transhipment via Israel

It has been proposed that oil from the BTC pipeline be transported to eastern Asia via the Israeli oil terminals at Ashkelon and Eilat, the overland trans-Israel sector being bridged by the Eilat-Ashkelon Pipeline owned by the Eilat Ashkelon Pipeline Company (EAPC).[20][21]

Shareholders of the pipeline

The pipeline is owned by a consortium of energy companies and BP (formerly British Petroleum), the operator of the pipeline. The shareholders of the consortium are:

Controversial aspects

Politics

Even before its completion, the BTC pipeline was having an effect on the world's oil politics. The South Caucasus, previously seen as Russia's backyard, is now a region of great strategic significance. The U.S. and other Western nations have become much more involved in the affairs of the three nations through which oil will flow. The countries have been trying to use the involvement as a counterbalance to Russian and Iranian economic and military dominance in the region.[16][22] Russian specialists claim that the pipeline will weaken the Russian influence in the Caucasus. The Russian Parliament Foreign Affairs Committee chairman Konstantin Kosachev stated that the United States and other Western countries are planning to station soldiers in the Caucasus on the pretext of instability in regions through which the pipeline passes.[23]

The project also constitutes an important leg of the East–West energy corridor, gaining Turkey greater geopolitical importance. The BTC pipeline also supports Georgia's independence from Russian influence. Former President Eduard Shevardnadze, one of the architects and initiators of the project, saw the construction of the pipeline through Georgian territory as a guarantee for the country's future economic and political security and stability. President Mikhail Saakashvili shares this view. "All strategic contracts in Georgia, especially the contract for the Caspian pipeline are a matter of survival for the Georgian state," he told reporters on 26 November 2003.[24]

Economics

Although some have touted the BTC pipeline as easing the dependence of the US and other Western nations on oil from the Middle East, it supplies only 1% of global demand during its first stage.[25]

The pipeline diversifies the global oil supply and so ensures, to an extent, against a failure in supply elsewhere. Critics of the pipeline—particularly Russia—are skeptical about its economic prospects.[26]

Construction of the BTC pipeline has contributed to the economies of the host countries. In the first half of 2007, a year after the completion and launch of BTC pipeline as the main export route for Azerbaijani oil, the real GDP growth of Azerbaijan hit a record of 35%.[27] Substantial transit fees accrue to Georgia and Turkey. For Georgia the transit fees are expected to produce an average of US$62.5 million per year.[22] Turkey is expected to receive approximately US$200 million in transit fees per year in the initial years of operation, with the possibility that the fees increase to US$290 million per year from year 17 to year 40. Turkey also benefits from an increase of commerce in the port of Ceyhan and other parts of eastern Anatolia, the region which had experienced significant decrease in economic activities since the Gulf War in 1991.[28] The reduction of oil tanker traffic on the Bosphorus will contribute to greater security for Istanbul.[29]

To counter concerns that oil money would be siphoned off by corrupt officials, Azerbaijan set up a state oil fund (SOFAZ), mandated with using revenue from natural resources to benefit future generations, bolster support from key international lenders, and improve transparency and accountability. Additionally, Azerbaijan became the first oil producing country in the world to join EITI, the British-led Extractive Industries Transparency Initiative.[16]

Security

Concerns have also been addressed about the security of the BTC pipeline.[30][31] It bypasses Armenia, which has unresolved conflict with Azerbaijan over the status of Nagorno-Karabakh, crosses through Georgia (which has two unresolved separatist conflicts) and goes through the edges of the Kurdish region of Turkey (which has seen a prolonged and bitter conflict with separatists).[32] It will require constant guarding to prevent sabotage, though the fact that almost all of the pipeline is buried will make it harder to attack.[16]

On 6 August 2008, a major explosion and fire in eastern Turkey Erzincan Province closed the pipeline. The Kurdistan Workers Party (PKK) claimed responsibility for the attack.[33] The pipeline was restarted on 25 August 2008.[34]

Environment

Critics of the pipeline have pointed out it should be properly earthquake engineered because the pipeline travels through three active earthquake faults in Azerbaijan, four in Georgia and seven in Turkey. Environmental activists fiercely opposed the crossing, by the pipeline, of the watershed of the Borjomi-Kharagauli National Park in Georgia, an area known for mineral water springs and natural beauty, although the pipeline itself does not enter the park.[35] The construction of the pipeline left a highly visible scar across the landscape. The Oxford-based "Baku Ceyhan Campaign" stated that "public money should not be used to subsidize social and environmental problems, purely in the interests of the private sector, but must be conditional on a positive contribution to the economic and social development of people in the region."[36] As the Borjomi mineral water is a major export commodity of Georgia, any oil spills there would have a catastrophic effect on the viability of the local water bottling industry.

The field joint coating of the pipeline has also been controversial on the claim that SPC 2888, which was the sealant used, was not properly tested.[37][38][39] BP and its contractors interrupted work until the problem was eliminated.[28]

The BTC pipeline eliminates 350 tanker cargoes per year through the sensitive congested Bosphorus and Dardanelles.[40]

Human rights

Human rights activists criticized Western governments for the pipeline, due to reported human and civil rights abuses by the Aliyev regime.[41] A Czech documentary film Zdroj (Source) underscores these human rights abuses, such as eminent domain violations in appropriating land for the pipeline's route, and criticism of the government leading to arrest.[42] .

In fiction

The BTC pipeline has been featured (in fictional form) in popular culture: it was a central plot point in the James Bond film The World Is Not Enough (1999). One of the film's central characters, Elektra King, is responsible for the construction of an oil pipeline through the Caucasus, from the Caspian Sea to the Mediterranean coast of Turkey. Named the "King pipeline" in the film, it is a thinly disguised version of the BTC.[32]

See also

Notes

  1. ↑ 1.0 1.1 1.2 "Operations of the BTC pipeline". BP. http://www.bp.com/genericarticle.do?categoryId=9006669&contentId=7014361. Retrieved 2007-03-01. 
  2. ↑ 2.0 2.1 "Kazakhstan starts transporting oil by Baku-Tbilisi-Ceyhan pipeline". Itar-Tass. 2008-11-03. http://www.itar-tass.com/eng/level2.html?NewsID=13236773&PageNum=0. Retrieved 2008-11-11. 
  3. ↑ 3.0 3.1 "Revolutions in the Pipeline". Kommersant. 2005-05-25. http://www.kommersant.com/page.asp?id=580345. Retrieved 2007-12-30. 
  4. ↑ "Moscow Negative About Baku-Ceyhan Pipeline". Pravda. 2004-01-13. http://english.pravda.ru/main/18/89/357/11772_pipeline.html. Retrieved 2007-12-30. 
  5. ↑ "Timeline of the Baku-Tbilisi-Ceyhan pipeline". Turkish Daily News. 2006-07-13. http://www.turkishdailynews.com.tr/article.php?enewsid=48692&contact=1. Retrieved 2007-12-30. 
  6. ↑ 6.0 6.1 Zeyno Baran (2005). "The Baku-Tbilisi-Ceyhan Pipeline: Implications for Turkey" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West (The Central Asia-Caucasus Institute, Silk Road Studies Program): 103–118. http://www.silkroadstudies.org/BTC_6.pdf. Retrieved 2007-12-30. 
  7. ↑ 7.0 7.1 "Baku-Tbilisi-Ceyhan Pipeline Company founded". Alexander's Gas & Oil Connections. 2002-08-30. http://www.gasandoil.com/goc/company/cnc23849.htm. Retrieved 2007-12-30. 
  8. ↑ "Caspian pipeline dream becomes reality". BBC News. 2002-09-17. http://news.bbc.co.uk/2/hi/europe/2263611.stm. Retrieved 2007-12-30. 
  9. ↑ "Giant Caspian oil pipeline opens". BBC News. 2005-05-25. http://news.bbc.co.uk/2/hi/business/4577497.stm. Retrieved 2007-12-30. 
  10. ↑ Jean-Christophe Peuch (2005-10-12). "Georgia: Regional Leaders Inaugurate Oil Pipeline Amid Environmental Concerns". RFERL. http://www.rferl.org/featuresarticle/2005/10/e5ce7b6a-4d3c-4bb1-af9b-74bdc62c6e83.html. Retrieved 2007-12-30. 
  11. ↑ 11.0 11.1 BP (2006-07-13). "BTC Celebrates Full Commissioning". Press release. http://www.bp.com/genericarticle.do?categoryId=9006615&contentId=7020655. Retrieved 2007-12-30. 
  12. ↑ "Caspian Oil Reaches Turkey's Mediterranean Port Ceyhan". Turkish Weekly. 2006-05-29. http://www.turkishweekly.net/news.php?id=32563. Retrieved 2007-03-01. 
  13. ↑ "BP: First Ship Loads Oil from New Caspian Pipeline". Downstream Today. 2006-06-05. http://www.downstreamtoday.com/News/Articles/200606/BP_First_Ship_Loads_Oil_from_New_Caspia_722.aspx. Retrieved 2008-11-02. 
  14. ↑ 14.0 14.1 14.2 14.3 "Overview of the BTC pipeline". BP. http://www.bp.com/genericarticle.do?categoryId=9006669&contentId=7014358. Retrieved 2007-12-29. 
  15. ↑ 15.0 15.1 15.2 15.3 "Caspian Connection" (PDF). Frontiers Magazine (BP): 18–26. August 2003. http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/F/Frontiers_magazine_issue_7_Caspian_connection.pdf. Retrieved 2008-11-02. 
  16. ↑ 16.0 16.1 16.2 16.3 16.4 Svante E. Cornell, Fariz Ismailzade (2005). "The Baku-Tbilisi-Ceyhan Pipeline: Implications for Azerbaijan" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West (The Central Asia-Caucasus Institute, Silk Road Studies Program): 61–84. http://www.silkroadstudies.org/BTC_4.pdf. Retrieved 2007-12-30. 
  17. ↑ (PDF) Trans Anatolian Pipeline Project. International Energy Agency. October 2006. http://www.iea.org/Textbase/work/2006/energy_security/Cavanna.pdf. Retrieved 2007-04-26. 
  18. ↑ "Dillinger plates for the BTC pipeline, the world's longest oil export pipeline". Dillinger Hütte GTS. http://www.dillinger.de/dh/referenzen/linepipe/01611/index.shtml.en. Retrieved 2007-12-30. 
  19. ↑ "BTC costs hit $3.9bn". Upstream Online (NHST Media Group). 2006-04-19. http://www.upstreamonline.com/live/article108550.ece. Retrieved 2008-03-07. 
  20. ↑ Avi Bar-Eli (2008-01-17). "Israel proposes crude pipeline from Georgia to Eastern Asia". Haaretz.com. http://www.haaretz.com/hasen/spages/945484.html. Retrieved 2008-01-19. 
  21. ↑ Rovshan Ibrahimov (2007-04-09). "Israeli Pipeline: Ashelon-Eilat-The Second Breath". Turkish Weekly. http://www.turkishweekly.net/comments.php?id=2564. Retrieved 2008-01-19. 
  22. ↑ 22.0 22.1 Vladimer Papava (2005). "The Baku-Tbilisi-Ceyhan Pipeline: Implications for Georgia" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West (The Central Asia-Caucasus Institute, Silk Road Studies Program): 85–102. http://www.silkroadstudies.org/BTC_5.pdf. Retrieved 2007-12-30. 
  23. ↑ Can Karpat (2005-09-15). "Baku-Tbilisi-Ceyhan: Pipeline of Friendship or War?". Axis Information and Analysis. http://www.axisglobe.com/article.asp?article=380. Retrieved 2007-12-30. 
  24. ↑ "Georgia's Saakashvili backs oil-pipeline plan". Seattle Times. 2003-11-27. http://community.seattletimes.nwsource.com/archive/?date=20031127&slug=georgia27. Retrieved 2008-08-12. 
  25. ↑ "The Pipeline War: Russian bear goes for West's jugular". Daily Mail Online. 2008-08-10. http://www.dailymail.co.uk/news/worldnews/article-1043185/The-Pipeline-War-Russian-bear-goes-Wests-jugular.html. Retrieved 2008-08-24. 
  26. ↑ "Russia skeptical about Baku-Tbilisi-Ceyhan pipeline". RIA Novosti. 2005-06-02. http://en.rian.ru/business/20050602/40460669.html. Retrieved 2007-12-30. 
  27. ↑ "Republic of Azerbaijan — Concluding Statement of the IMF Mission". International Monetary Fund. 2007-09-06. http://www.imf.org/external/np/ms/2007/092607.htm. Retrieved 2007-12-30. 
  28. ↑ 28.0 28.1 Jonathan Elkind (2005). "Economic Implications of the Baku-Tbilisi-Ceyhan Pipeline" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West (The Central Asia-Caucasus Institute, Silk Road Studies Program): 39–60. http://www.silkroadstudies.org/BTC_3.pdf. Retrieved 2007-12-30. 
  29. ↑ "Loading of Azeri Crude Oil from BTC Pipeline Begins". Today's Zaman. 2006-06-03. http://www.zaman.com/?bl=hotnews&alt=&trh=20060603&hn=33694. Retrieved 2007-03-01. 
  30. ↑ Nick Paton Walsh (2003-12-01). "Russia accused of plot to sabotage Georgian oil pipeline". The Guardian. http://www.guardian.co.uk/international/story/0,3604,1096825,00.html. Retrieved 2007-12-30. 
  31. ↑ Gal Luft (2004-11-04). Baku-Tbilisi-Ceyhan pipeline: not yet finished and already threatened. Institute for the Analysis of Global Security. http://www.iags.org/n1104041.htm. Retrieved 2007-12-30. 
  32. ↑ 32.0 32.1 The pipeline also gets a mention in "Aggressor" a novel by Andy Mcnab. Mark Tran (2005-05-26). "Q&A: The Baku-Tbilisi-Ceyhan pipeline". The Guardian. http://www.guardian.co.uk/business/2005/may/26/businessqandas.oilandpetrol. Retrieved 2007-12-30. 
  33. ↑ "PKK assumes responsibility for explosion of BTC". APA. 2008-08-06. http://en.apa.az/news.php?id=86325. Retrieved 2008-08-06. 
  34. ↑ "Oil Falls for a Second Day as BP Restarts Caspian Sea Pipeline". Bloomberg. 2008-08-25. http://www.bloomberg.com/apps/news?pid=20601087&sid=amTrZ4bgfyFw&refer=home. Retrieved 2008-08-25. 
  35. ↑ Michael Meacher (2005-06-15). "Casualties of the oil stampede". The Guardian. http://www.guardian.co.uk/comment/story/0,3604,1506665,00.html. Retrieved 2007-12-30. 
  36. ↑ "About the Baku Ceyhan Campaign". http://www.bakuceyhan.org.uk/about.htm. Retrieved 2008-10-23. 
  37. ↑ Michael Gillard; David Connett (2005-04-17). "BP 'covered up' pipeline flaw". London: Times Online. http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article381934.ece. Retrieved 2007-12-29. 
  38. ↑ "The full story: Pipeline corrosion threat covered up by BP". Baku Ceyhan Campaign. http://www.bakuceyhan.org.uk/fullstory.htm. Retrieved 2008-10-28. 
  39. ↑ "What's the problem? Field joint coatings - The basics". Baku Ceyhan Campaign. http://www.bakuceyhan.org.uk/coatings.htm. Retrieved 2008-10-28. 
  40. ↑ "BTC pipeline a welcome relief for Turkish straits". Turkish Daily News. 2006-07-10. http://www.turkishdailynews.com.tr/article.php?enewsid=48426. Retrieved 2008-11-02. 
  41. ↑ "Human Rights Overview - Azerbaijan". Human Right Watch. http://hrw.org/english/docs/2006/01/18/azerba12226.htm. Retrieved 2007-12-30. 
  42. ↑ Eddie Cockrell (2005-07-18). "Source. A review". Variety. http://www.variety.com/review/VE1117927708.html?categoryid=31&cs=1&p=0. Retrieved 2007-12-29. 

References

External links