Baku-Tbilisi-Ceyhan pipeline

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The Baku-Tbilisi-Ceyhan pipeline (sometimes abbreviated as BTC pipeline) is a crude oil pipeline that covers 1,768 kilometres (1,099 mi) 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.[1]

Route of the Baku-Tbilisi-Ceyhan pipeline
Route of the Baku-Tbilisi-Ceyhan pipeline

Contents

[edit] History

[edit] Planning

The Caspian Sea lies above one of the world's largest groups of oil and gas fields. As the Caspian Sea is landlocked, the transportation of 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 started a search for new routes. Russia first insisted that the new pipeline should pass through Russian territory, then declined to participate.[2][3] A pipeline across Iran from the Caspian Sea to the Persian Gulf would have provided the shortest route, 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 greatly restrict Western investment (especially by American companies) in the country. The United States government opposed any route that would pass through Iran[4].

At the time, Turkey called for energy transit through Turkey, insisting that this would be the safest and most economic route for export. In the spring of 1992, the Turkish Prime Minister Süleyman Demirel made this proposal to Central Asian countries and Azerbaijan. 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 choice of a Turkish route meant oil export from Azerbaijan via either Georgia or Armenia. For several reasons a route through Armenia was politically inconvenient, mainly because of the unresolved military conflict between Armenia and Azerbaijan over Nagorno-Karabakh.[6] This left the 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.[6]

[edit] Construction

The Baku-Tbilisi-Ceyhan Pipeline Company (BTC Co.) was founded during a document signing ceremony in London on 1 August 2002.[7] The official ceremony launching construction of the pipeline was held on 18 September 2002.[8] Construction began in April of 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.[7]

[edit] Inauguration

All together, three official inauguration ceremonies were held. On 25 May 2005, the pipeline was officially 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]

Oil that was pumped from the Baku end of the pipeline on May 10, 2005 reached Ceyhan in May 28, 2006 after a journey of 1,770 km.[1] The first oil was loaded at the Cheyhan Marine Terminal (Haydar Aliyev Terminal) onto a ship named British Hawthorn.[12] The tanker sailed away from the port on 4 June 2006 with about 600,000 barrels of crude oil. This marked the start of export of Azerbaijan’s oil via the BTC oil pipeline to world markets.

[edit] Description of the pipeline

[edit] Route

The pipeline starts from the Sangachal Terminal near Baku in Azerbaijan. The route of the pipeline crosses Azerbaijan, Georgia and Turkey to Ceyhan. The pipeline's destination is the Ceyhan Marine Terminal (Haydar Aliyev Terminal) on the south-eastern Mediterranean coast of Turkey. Of its total length of 1,768 kilometres (1,099 mi), 443 kilometres (275 mi) 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).[13] 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).[1] The pipeline occupies a corridor eight meters wide, and is buried along its entire length at a depth of no less than one meter.[14] Parallel to the BTC pipeline runs the South Caucasus Gas Pipeline, which transports natural gas from the Sangachal Terminal to Erzurum in Turkey.[13] Between Sarız and Ceyhan, the Samsun-Ceyhan oil pipeline will be laid along the same corridor.[15]

[edit] Technical features

The pipeline has a projected lifespan of 40 years, and when working at normal capacity, beginning in 2009, will transport 1 million barrels (160 000 m³) of oil per day. It has a capacity of 10 million barrels of oil, which will flow through the pipeline at 2 metres (6.6 ft) per second.[1] There are 8 pump stations through the pipeline route (2 in Azerbaijan, 2 in Georgia, 4 in Turkey). The project includes also the Ceyhan Marine Terminal, two intermediate pigging stations, one pressure reduction station, and 101 small block valves.[13] 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 approximately 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.[16]

[edit] Cost and financing

The pipeline cost US$3.9 billion.[17] Around 15,000 people were employed during the construction of the pipeline. Approximately 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.[13]

[edit] 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.[2] The government of Kazakhstan had announced that it would seek to build a trans-Caspian oil pipeline from the Kazakhstani port of Aktau to Baku and in turn to the BTC pipeline. However, due to opposition to a Caspian offshore pipeline by both Russia and Iran, the oil pipeline is doubtful. Therefore Kazakhstan has announced a new project named Kazakh-Caspian Transportation System, which is scheduled to come into operation in 2010. The project includes a pipeline from Iskene to the Caspian port of Kuryk, terminals in Kazakhstan and Azerbaijan, and construction of oil tankers.[18] The project is at the pre-feasibility stage.

[edit] Possible transhipment via Israel

It has been proposed that oil from the BTC pipeline may 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).[19][20]

[edit] Shareholders of the pipeline

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

[edit] Controversial aspects

[edit] Politics

Even before its completion, the BTC pipeline was affecting the world's oil politics. The South Caucasus, previously seen as Russia's backyard, is now a region of great strategic significance to other great powers. The U.S. and other Western nations have consequently become much more closely involved in the affairs of the three nations through which oil will flow. Some have criticized this degree of western involvement in the South Caucasus, arguing that it has led to an unhealthy dependence on undemocratic leaders.[citation needed] The countries themselves though have been trying to use the involvement as a counterbalance to Russian and Iranian economic and military dominance in the region.[14][21] It is seen similarly by Russian specialists claiming that the pipeline is aimed to weaken the Russian influence in Caucasus. The Russian Parliament Foreign Affairs Committee chairman Konstantin Kosachev even stated that the United States and other Western countries are planning to settle their soldiers in Caucasus on the pretext of instability in regions where the pipeline passes through.[22]

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 certain guarantee for the country's future economic and political security and stability. This view has been fully shared by his successor President Mikhail Saakashvili. "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.[citation needed]

[edit] Economics

Although some have touted the BTC pipeline as potentially removing the dependence of the US and other Western nations on oil from the Middle East, in reality it doesn't change global dependence on Middle Eastern oil as it supplies only 1% of global demand during its first stage.[citation needed] However, the pipeline diversifies the global oil supply and so insures, to an extent, against a failure in supply elsewhere. Critics of the pipeline—particularly Russia—are skeptical about its economic prospects and see this as politically motivated.[23]

Construction of the BTC pipeline has contributed significantly 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%.[24] Substantial transit fees accrues to Georgia and Turkey. For Georgia the transit fees are expected to produce an average of US$62.5 million per year.[21] Turkey is expected to receive approximately US$200 million in transit fees per year in the initial years of operation, with the possibility of increasing to US$290 million per year from year 17 to year 40. Turkey is also benefitting from an increase in economic activity in eastern Anatolia, including increased importance of the port of Ceyhan, which had experienced significant reductions of activities since the 1991 Gulf War.[25] The reduction of oil tanker traffic on the Bosphorus will contribute to greater security for Istanbul.[26]

One of the concerns related to the use of oil revenues is the level of corruption. To counter concerns that oil money would be siphoned off by corrupt officials, Azerbaijan has set up a State oil fund (State Oil Fund of the Republic of Azerbaijan, or SOFAZ), expressly mandated with using natural-resource revenue to benefit future generations, to bolster support from key international lenders and improve transparency and accountability. SOFAZ is audited by Deloitte and Touche. Additionally, Azerbaijan became the first oil producing country in the world to join EITI — the British-led Extractive Industries Transparency Initiative.[14]

[edit] Security

Concerns have also been addressed about the security of the BTC pipeline.[27][28] It deliberately bypasses the border of Armenia (with which Azerbaijan is still technically at war over the status of the Armenian-populated separatist region of Nagorno-Karabakh in Azerbaijan), 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 separatist terrorists).[29] 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.[14]

[edit] Environment

Several ecological issues had been raised concerning the BTC pipeline. Critics of the pipeline have pointed out that the region through which it travels is highly seismic, suffering from frequent earthquakes. The route takes the pipeline through three active faults in Azerbaijan, four in Georgia and seven in Turkey. The pipeline's engineers have equipped it with a number of technical solutions to reduce its vulnerability to earth movements. However, the BTC pipeline for almost half of its entire route goes through the same territory as the Baku-Supsa pipeline, which has been in operation since 1999 and has an exemplary safety record. [citation needed]

The pipeline crosses the watershed of the Borjomi-Kharagauli National Park (albeit not entering the park territory), an area of mineral water springs and outstanding natural beauty in Georgia.[30] This has long been the subject of fierce opposition by environmental activists. Since the pipeline is buried for its entire length, constructing it has left a highly visible scar across the landscape. The Oxford-based "Baku Ceyhan Campaign" averred that "public money should not be used to subsidise 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."[citation needed] 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 an area of controversy as there were shortcomings in tests of used sealant SPC 2888.[31] BP and its contractors interrupted work until the problem was eliminated.[25]


On the positive side, the BTC pipeline eliminates 350 tanker cargoes per year through the sensitive and very congested Bosphorus and Dardanelles. The World Bank as a condition of financing required the use of catalytic converters on the 18 large Wärtsilä engine driven compressors used to transport the oil through the pipeline in the Turkish portion. Consequently each of the 7600 hp engines have reduced their carbon dioxide and volatile organic compounds emissions by greater than 90% providing a significant air quality improvement over the 350 tanker shipments through the Bosphorus.[32]

[edit] Human rights

Human rights activists criticized Western governments for the pipeline, due to reported human and civil rights abuses by the Aliyev regime.[33] 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.[34] The project was also criticized by the Kurdish Human Rights Project.

[edit] 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.[29]

[edit] See also

[edit] Notes

  1. ^ a b c d Operations of the BTC pipeline. BP. Retrieved on 2007-03-01.
  2. ^ a b Revolutions in the Pipeline. Kommersant (2005-05-25). Retrieved on 2007-12-30.
  3. ^ Moscow Negative About Baku-Ceyhan Pipeline. Pravda (2004-01-13). Retrieved on 2007-12-30.
  4. ^ Warnock, John W.. Why Are Canadians Dying in Afghanistan? For Oil. Retrieved on 2008-02-07.
  5. ^ Timeline of the Baku-Tbilisi-Ceyhan pipeline. Turkish Daily News (2006-07-13). Retrieved on 2007-12-30.
  6. ^ a b Zeyno Baran (2005). "The Baku-Tbilisi-Ceyhan Pipeline: Implications for Turkey" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West: 103-118. The Central Asia-Caucasus Institute, Silk Road Studies Program. 
  7. ^ a b Baku-Tbilisi-Ceyhan Pipeline Company founded. Alexander's Gas & Oil Connections (2002-08-30). Retrieved on 2007-12-30.
  8. ^ Caspian pipeline dream becomes reality. BBC News (2002-09-17). Retrieved on 2007-12-30.
  9. ^ Giant Caspian oil pipeline opens. BBC News (2005-05-25). Retrieved on 2007-12-30.
  10. ^ Jean-Christophe Peuch (2005-10-12). Georgia: Regional Leaders Inaugurate Oil Pipeline Amid Environmental Concerns. RFERL. Retrieved on 2007-12-30.
  11. ^ a b BTC Celebrates Full Commissioning. Press Release. PB (2006-07-13). Retrieved on 2007-12-30.
  12. ^ Caspian Oil Reaches Turkey's Mediterranean Port Ceyhan. Turkish Weekly (2006-05-29). Retrieved on 2007-03-01.
  13. ^ a b c d Overview of the BTC pipeline. BP. Retrieved on 2007-12-29.
  14. ^ a b c d 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: 61-84. The Central Asia-Caucasus Institute, Silk Road Studies Program. 
  15. ^ Trans Anatolian Pipeline Project (PDF). International Energy Agency (October 2006). Retrieved on 2007-04-26.
  16. ^ Dillinger plates for the BTC pipeline, the world's longest oil export pipeline. Dillinger Hütte GTS. Retrieved on 2007-12-30.
  17. ^ "BTC costs hit $3.9bn", Upstream Online, 2006-04-19. Retrieved on 2008-03-07. 
  18. ^ Kazakhstan Trans-Caspian Oil Transportation System. KOGIG UK. Retrieved on 2007-12-29.
  19. ^ Avi Bar-Eli (2008-01-17). Israel proposes crude pipeline from Georgia to Eastern Asia. Haaretz.com. Retrieved on 2008-01-19.
  20. ^ Rovshan Ibrahimov (2007-04-09). Israeli Pipeline: Ashelon-Eilat-The Second Breath. Turklish Weekly. Retrieved on 2008-01-19.
  21. ^ a b Vladimer Papava (2005). "The Baku-Tbilisi-Ceyhan Pipeline: Implications for Georgia" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West: 85-102. The Central Asia-Caucasus Institute, Silk Road Studies Program. 
  22. ^ Can Karpat (2005-09-15). Baku-Tbilisi-Ceyhan: Pipeline of Friendship or War?. Axis Information and Analysis. Retrieved on 2007-12-30.
  23. ^ Russia skeptical about Baku-Tbilisi-Ceyhan pipeline. RIA Novosti (2005-06-02). Retrieved on 2007-12-30.
  24. ^ Republic of Azerbaijan — Concluding Statement of the IMF Mission. International Monetary Fund (2007-09-06). Retrieved on 2007-12-30.
  25. ^ a b Jonathan Elkind (2005). "Economic Implications of the Baku-Tbilisi-Ceyhan Pipeline" (PDF). The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West: 39-60. The Central Asia-Caucasus Institute, Silk Road Studies Program. 
  26. ^ Loading of Azeri Crude Oil from BTC Pipeline Begins. Today's Zaman (2006-06-03). Retrieved on 2007-03-01.
  27. ^ Nick Paton Walsh (2003-12-01). Russia accused of plot to sabotage Georgian oil pipeline. The Guardian. Retrieved on 2007-12-30.
  28. ^ Gal Luft (2004-11-04). Baku-Tbilisi-Ceyhan pipeline: not yet finished and already threatened. Institute for the Analysis of Global Security. Retrieved on 2007-12-30.
  29. ^ a b Mark Tran (2005-05-26). Q&A: The Baku-Tbilisi-Ceyhan pipeline. The Guardian. Retrieved on 2007-12-30.
  30. ^ Michael Meacher (2005-06-15). Casualties of the oil stampede. The Guardian. Retrieved on 2007-12-30.
  31. ^ Michael Gillard; David Connett (2005-04-17). BP 'covered up' pipeline flaw. Times Online. Retrieved on 2007-12-29.
  32. ^ Oxidation Catalysts for BTC Pipeline. DCL International Inc.. Retrieved on 2007-12-29.
  33. ^ Human Rights Overview - Azerbaijan. Human Right Watch. Retrieved on 2007-12-30.
  34. ^ Eddie Cockrell (2005-07-18). Source. A review. Variety. Retrieved on 2007-12-29.

[edit] References

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