A series of projects being carried out in the Caspian region over the next five years will result in a near fivefold increase in Azerbaijan’s oil production. The Baku-Tbilisi-Ceyhan (BTC) pipeline project will give Azerbaijan, which was one of the first oil- producing countries in the world, easy access to the global crude oil market. The US$2.95 billion BTC line is capable of transporting one million barrels a day from Caspian shores to the Mediterranean for export to the US and Europe. The BTC pipeline will be laid in the next three years, taking oil from the offshore Azeri-Chirag-Guneshli oilfields in Azerbaijan, via Georgia, to Turkey’s Ceyhan terminal – a distance of 1,720km – from where the ships can carry the oil to international markets. The pipeline will cross more than 1,500 rivers and will climb to a high point of 2,700 metres before returning to sea level at Ceyhan. The physical construction work will commence in the first quarter of 2003 and will be completed by 2005 to coincide with the next phase of development of the giant Azeri-Chirag-Guneshli oilfield.
The BTC project is being managed by BP on behalf of an international group of investors. In August 2002, the BTC pipeline’s owners created ‘The Baku- Tbilisi-Ceyhan Pipeline Company’ (‘BTC Co.’), which will construct and operate the BTC oil pipeline. The BTC Co. shareholders are currently BP, State Oil Company of the Azerbaijan Republic (SOCAR), Unocal, Statoil, Turkiye Petrolleri AO (TPAO), Eni, TotalFinaElf, Itochu, INPEX, ConocoPhillips and Amerada Hess. In September 2002, the BTC was sanctioned in a ceremony that was held to celebrate the start of the construction phase of the project. The presidents of Azerbaijan, Georgia and Turkey attended this event, which marked a major milestone in the pipeline’s realisation.
The contract awards (to Greek-based Consolidated Contractors International Company (CCIC) for pipelay in Azerbaijan, and Franco-British Spie Capag/US Petrofac for pipelay in Georgia and facilities in both countries) were the result of a meticulous screening process that narrowed down a field of 120 companies to eight that were invited to tender. Importing some 155,000 tonnes of steel pipe for the Azerbaijan section alone is a challenge. Despite being on the Caspian Sea, Azerbaijan is land-locked, so the pipe from Japan will be transported to the port of Poti on the Black Sea and then by rail to Azerbaijan. Additional contracts have been awarded by BOTAS Petroleum Pipeline Corporation, BTC’s contractor for the Turkey contract, including awards for pipelay, pump stations and the terminal in Ceyhan.
Figure 1: The BTC Pipeline Route
The route for the BTC pipeline has been chosen with great care to avoid disturbance to both natural environments and populations in the area. The entire length of the line will be buried and will carry oil unseen and unheard past neighbouring communities. Full environmental and social impact assessments (ESIAs) were conducted for the BTC project and were followed by a two-month consultation period with a wide circle of stakeholders including national and local authorities, non-governmental organisations, the media and local communities. The assessment documents describe the existing environmental and social conditions along the pipeline route, predicted effects of these activities and the measures that will be taken to prevent and mitigate any negative impacts on the ecology and population. The ESIAs were submitted to relevant government bodies in Azerbaijan, Georgia and Turkey and have been approved. This will allow construction of the BTC pipeline tocommence in 2003 for the route selected in the detailed engineering phase.
The next step was to begin the land acquisition process in all the three countries. Having selected the optimum route, the project team began the task of securing the rights that would allow access to each section of the route for construction and for reinstatement of the land immediately afterwards. This involved negotiations with almost 20,000 landowners and users whose land will be crossed during construction. In Azerbaijan alone, survey teams interviewed 7,000 landowners to record the existing condition of the land and to ascertain the concerns of people about the project. A key objective is to minimise the impact on daily life and to leave the smallest footprint possible while construction teams are working on any given section. All landowners and users will receive fair compensation for any damage or loss of income, and there will be a clearly defined method for resolving any dispute that might arise.
Throughout construction and reinstatement, the project will provide temporary employment opportunities for local people – often in areas of high unemployment. It is expected that the pipeline will provide around 10,000 jobs at the peak of the construction phase. Where land is required for the project, either on a permanent or temporary basis, landowners and people using the land will receive compensation for this and for any loss of income, which will be determined through a transparent process.
The construction of the BTC oil pipeline is currently one of the greatest projects in the oil sector of the world economy. This challenging project will make a positive difference by bringing significant benefits to the region. By avoiding the Bosphorus Strait, it will relieve the inevitable growth in oil-related traffic and associated environmental risks, will create substantial revenues for the transit countries and will help strengthen economic and political links between Azerbaijan, Georgia, Turkey and the West. In addition, the BTC project will generate short-term construction and long-term operation employment opportunities for supply of goods and services by local businesses, and will provide community and environmental investment programmes.
Baku-Tbilisi-Ceyhan Pipeline Facts
- 1,760km long
- Eight pump stations
- Rises to a height of 2,800 feet
- 42 inches wide in Azerbaijan and Turkey, 46 inches in Georgia
- Capable of pumping one million barrels per day
- To be operated by BTC Co. for 20 years
- Costing US$2.95 billion in total
- Construction will commence first quarter of 2003
- Transportation starts spring 2005
Category:
Transportation
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