Turkish Daily News, 96-05-11
From: Turkish Ministry of Foreign Affairs <http://www.mfa.gov.tr>
TURKISH DAILY NEWS
11 May 1996
CONTENTS
[01] Turkey wants 25 million tons throughput guarantee for Baku-Ceyhan
pipeline
[01] Turkey wants 25 million tons throughput guarantee for Baku-Ceyhan
pipeline
Energy Minister Dogan says there is no point in building a pipeline
if it is not a rational project
Turkish Daily News
ANKARA- Following Foreign Ministry declarations that Turkey
was looking for alternatives for transporting Caspian oil via
Turkey, the Energy Ministry interjected that a Turkish-built Baku-
Ceyhan
pipeline would be feasible only if a throughput of 25 million
tons of oil annually was guaranteed.
"Turkey will continue its intensive contacts for the realization
of the Baku-Ceyhan pipeline," Energy Minister Husnu Dogan
said in a press conference on Friday. "This will be a 1650-kilometer-
long
pipeline that would cost about $2 billion.
But the throughput guarantee of this pipeline should be a minimal
of 25 million tons to make such a project feasible."
Ideally, the pipeline will pass through Azerbaijan, Georgia and
Turkey. It is not a new project as it had been proposed in 1993,
although the Azerbaijan International Operation Consortium (AIOC),
which is responsible for transporting oil from three Azeri oil
fields, later preferred a route that took the Azeri oil to the
Georgian Black Sea port of Supsa. An additional one was one that
would take the oil to the Russian port of Novorossyisk.
The three Azeri oil fields will be exploited by a 12-member consortium
in which British Petroleum and Amoco hold the largest stakes.
It also includes SOCAR, the Turkish company TPAO, LUKoil of Russia,
Pennzoil, Ramco, Unocal, Statoil, McDermott, Delta and Exxon.
TPAO's shares in the consortium are 6.75 percent.
Ankara's announcement that it was "looking for alternatives"to
transport Azeri oil via Turkey came amid mounting Turkish fear
that the project had slipped through its fingers. Last week, Russia
and Kazakhstan signed an agreement for building a pipeline via
the Tenghiz fields to the Russian port of Novorossyisk. As this
line can be used for transportation of Azeri oil as well, Turkey
feared that the Baku-Supsa line would lose its chances of being
built and started simultaneously with the Russian route, particularly
when the financing accord for the unbuilt line has not been signed.
Moreover, Turkey, which had originally pledged to finance the
pipeline, failed to get its conditions accepted and withdrew its
offer Tuesday.
A day later, Turkish Foreign Ministry Deputy Spokesman Nurettin
Nurkan announced that Turkey would start direct talks with Georgia
and Azerbaijan for building an oil pipeline. The talks would include
throughput guarantee and transit rights.
Turkey will also hold talks with major powers on the pipeline.
Foreign Minister Emre Gonensay will visit the United States May
19-22 where he will ask Washington to reinstate its support for
the transportation of Caspian oil via Turkey. During the same
period, a Turkish delegation which includes the new chief of the
Turkish pipeline company BOTAS will go to Russia to discuss natural
gas sales but use the opportunity to see if Turkey and Russia
could cooperate, rather than clash, on the oil routes.
"Let me stress that the construction of the Baku-Ceyhan pipeline
necessitates a productive and reconciliatory approach by the related
countries so that the project can be feasible," Energy Minister
Dogan, a former State Planning Organization technocrat, said.
In an apparent move to comfort Russia, he said that Turkey did
not insist on transport all of Caspian oil via its territory.
"We only want the transportation of excess oil, so that the
safety of the straits will not be threatened," Dogan said.
Presently 30 million tons of oil passes through the Turkish straits
in a year. Turkey has recently imposed a regulation for safety
of passage from the straits, urging large tankers to take pilotage.
"The Baku-Supsa project was an indirect (contribution) to
the Baku-Ceyhan line, so that Caspian early oil will not be pushed
all to Russia," Dogan said.
"Early oil" is a term used to designate the limit placed
on the amount of petrol that can be extracted from three Azeri
oil fields in the Caspian sea. Up to 5 million tons per year can
be extracted for export for up to eight years.
The two pipelines -- the Russian route and Georgian route --chosen
for the early oil will have a total capacity of 25 million tons
annually. Ankara, as a condition for its financing of the Georgian
line, said that the pipeline should not have a capacity to carry
more than 6 million tons of oil annually.
The first oil was due to start flowing in the second half of 1996,
but has been postponed until 1997.
"We should not let our imagination soar. It is not realistic
to build a pipeline if it is not a rational project," Dogan
said.
However, it is still unclear whether Turkey can actually get a
guarantee of throughput of 25 million tons. Energy sources say
that the Caspian oil production will be 140 million tons annually,
but this will only be by the year 2010.
AIOC says it will decide the crucial question of its main oil
transport route by mid-1997 among 28 route options.
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