Baku-Tbilisi-Ceyhan pipeline

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 world after the Druzhba pipeline. The first oil that was pumped from the Baku end of the pipeline on May 10, 2005 reached Ceyhan on May 28, 2006.

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. A pipeline through Iran from the Caspian Sea to the Persian Gulf is the shortest route from a geographic standpoint, but Iran was considered an undesirable partner for a number of reasons: its theocratic government, concerns about its nuclear program, and United States sanctions that restrict U.S. companies' investment in the country.

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.

The Turkish route meant a pipeline from Azerbaijan through either Georgia or Armenia. A route through Armenia was inconvenient, due to regional tensions over Turkey's refusal to recognize the Armenian Genocide, as well as the unresolved military conflict between Armenia and Azerbaijan over Nagorno-Karabakh. This left the circuitous Azerbaijan-Georgia-Turkey route as politically most expedient for the major parties, although it was longer and more expensive to build than the other options.

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 Islom 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.

Construction

The Baku-Tbilisi-Ceyhan Pipeline Company (BTC Co.) began in London on 1 August 2002. The ceremony launching construction of the pipeline was held on 18 September 2002. 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 US Petrofac Petrofac International. The Turkish section was constructed by BOTAŞ. Bechtel was the main contractor for engineering, procurement and construction.

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. 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. The inauguration ceremony at the Ceyhan terminal was held on 13 July 2006.

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

Description of the pipeline

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). 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). The pipeline occupies a corridor eight meters wide, and is buried along its entire length at a depth of no less than one meter. The BTC pipeline runs parallel to the South Caucasus Gas Pipeline, which transports natural gas from the Sangachal Terminal to Erzurum in Turkey. From Sarız to Ceyhan, the Samsun-Ceyhan oil pipeline will be laid parallel to the BTC pipeline.

Technical features

The pipeline has a projected lifespan of 40 years, and when working at normal capacity, it transports 1 million barrels (160,000 m3) of oil per day. It needs 10 million barrels (1,600,000 m3) of oil to fill the pipeline. Oil flows through the pipeline at the speed of 2 metres (6.6 ft) per second. 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), two intermediate pigging stations, one pressure reduction station, and 101 small block valves. It was constructed from 150,000 individual joints of line pipe, each measuring 12 metres (39 ft) in length. This corresponds to a total weight of 655,000 short tons (594,000 metric tons). The pipeline is 1,070 mm (42 inches) diameter for most of its length, narrowing to 865 mm (34 inches) diameter as it nears Ceyhan.

Cost and financing

The pipeline cost US$3.9 billion. The construction created 10,000 short-term jobs and the operation of pipeline requires 1,000 long-term employees across a 40 year period. 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.

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 the 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.

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).