EARLY IN 2005 TURKEY WILL BE READY TO RECEIVE BTC OIL

Late in January on pipe base VTS SO in Absheron district Umbaki (not far from oil terminal in Sangachal) it was held ceremony of the first consignment of pipes for pipeline BTC construction. President SOCAR Natig Aliyev took part at mentioned ceremony and vice president of BP Azerbaijan on issues of oil export Mikle Taunced. The pipes had been delivered to Baku from Georgian port Poti at Black Sea shoreline of Georgia. The first consignment consisted of 240 pieces 42-inch pipes (by 8 units in each car) had been delivered from Poti on railway carriage by German Company Kuhne & Nagle, setting out as a subcontractor upon expediting services for Azerbaijanian pipeline area. Length of one pipe makes up 11,6m, width-12-19mm. The first pipe had been delivered to Poti in January 14 by ship "Kaledonya", being belonged to Britain Bertling, dealing with cargo transshipments. Tubes are made in Japan Sumitomo Corporation, and their covering carried out in Malaysia. Services on delivery there were presented Azerbaijan State Rail Road. The pipes will be stored at pipe base in Umbaki, and from there they will be delivered alongside the corridor of the pipeline in the beginning of spring, when it is being planned to start refurbishing activities.

That consignment will be laid at the first 29th azerbaijan area of oil pipeline trunk, commencing from Sangachali. The remaining part of pipes will be stored on the bases in Mugani, Kurdamir, Evlakh, Agstafa, Gandja. For Azerbaijanian area of the oil pipeline with extension of 460 km it is required approximately 39 000 sections of pipes. Pipes deliveries will be continued approximately 7 months. Each ship will deliver 25-30 km of pipes.

As representative of Greek CCIC company informed, which is dealing with pipes laying on the territory of Azerbaijan and Georgia Gasi Anuti, the beginning of pipes to be laid in trench will be done in the end of June. "Constructional works done at azerbaijan area will be started in April and will be finished in the end of the year" - he noted. By his words minimum term of pipes exploitation will make 40 years. However under reliable technical care they will be able to serve much longer.

As President of SOCAR Natig Aliyev noted, by subcontractors of BTC construction on the territory of Azerbaijan had been selected local companies Baku Engineering Azerkorpu and Rovshan.

BTC figures

“BTC Oil pipeline company announced on financial plans of project of Baku-Tbilisi-Ceyhan pipeline, particularly, on quantity of assets, which will be subsided on different constructional works.

Nowadays, BTC Co foreseen to allotment approximately $2,2 bln out of necessary ones for the project valued at $2,95 bln to be realized, vice President of BP Azerbaijan on the issues of oil export Michael Taunlend informed. Under his words at that sum it had already ordered the equipment, there are appropriate tenders were run and so on.

"We are expecting the financing. Each daily for the project to be realized we spend $ 4 mln", - he noted. He emphasized that two grand banks - International financing company and EBRR will take part in financing of BTC. In August 2002 it was signed the document "list of terms" on financing the project. Since that period of time BTC Co had initiated negotiations with series of other banks - export import banks. "And we in conjunction with all of them are carrying negotiations parallely. Talking is on not only on commercial terms, banks still are wishing to discuss the issues of social and ecology protection - they have appropriate demands upon those issues.

By words of M.Tauntcenda in accordance with those requirements there are being compiled documents and being discussed with them and afterwards, within 2-3 months there is revision process is completed and the said documentation is set on consideration of the society. During 120 days they are staying at the site for familiarization.

More than 9% of BTC work performed

On direct beginning of BTC construction it was announced on September 18, 2002, when in terminal in Sangachali it had passed solemn ceremony of the first pipe to be laid. By words of President SOCAR, Natig Aliyev, according to the schedule of works on construction of BTC today is already done 9% of works. "We expect that up to the end of this year it will be performed 50% of all volume of works and in the end of the following year the oil pipeline will be ready. At azerbaijan area we expect work to be completed approximately in August-September, in a month after that there Georgian area will be ready and in the beginning of 2005 Turkish party will be prepared for an amount of oil to be taken", - he noted. According to his words by main process it was lands to be purchased alongside the corridor of the route. He emphasized that already started physical works, i.e all new equipment will be ordered; it is being prepared and will be delivered to destination.

Having been concerned Kazakhstan to the BTC, the head of SOCAR noted that the above has great significance and it envisages support of the project. "But from another side without Kazakhstan such oil pipeline will be ready"- N. Aliyev said. He reminded that in London had already held another one meeting from the part of Kazakhstan party. The next one is going to be held in February or in March in Kazakhstan. By basic issues in that trend are preparation of several documents, including interstate treaty having been signed between

Azerbaijan and Kazakhstan, the agreement between the government and companies being operated in Kazakhstan regarding issues of the infrastructure. "Following signing those documents we are able to say in which terms Kazakhstan is capable to join BTC. I think that as a minimum up to the end of the year we will work over that", - noted he.

Contracts

In frames of BTC construction it is presumed to attract many local constructional and other companies. For instance, AO Azneftkimyamash had already produced and supplied for Greek Consolidated Contractors International Co (CCIC) 4 fueled tankers for technical works to be done in the frames of BTC to be refurbished on the territory of Azerbaijan Republic. Having signed with CCIC the contract is not restricted only with tankers to be produced, which will be used at BTC area.

AO at present time works less than in the half of project capacity, but production of some of types of equipment is being produced in accordance with standard API. Namely, availability of such type of certificate would had allowed Azneftkimyamash to conclude signed contract with CCIC.

Each daily for the realisation of the project of main export pipeline Baku-Tbilisi-Ceyhan to be constructed it is spent $4 mln. Such figure had been brought for journalists main executive director BTC Co. (BAKU-TBILISI-Ceyhan) Michael Taunshend. By his words out of $2,95 bln, being necessary for the project to be implemented; upon contracts had already distributed $2,2 bln. M Taushend as well as informed that since March on Azerbaijani area of the pipeline are expected to commence landing works. The first pipe will be laid in June, and fully azerbaijan area laying' will be completed in the end of 2003. However, that does not envisages that completion of constructional works, since beyond the laying will follow hydraulic testing and calibration. The laying of pipes alongside of all MEP BTC is supposed to complete in the second quarter of 2004. In the end of the same year the pipeline will be filled with oil.

Nowadays, in the frame of the project to be implemented in conjunction with pipes to be delivered in Azerbaijan and Georgia there is process is going on as to lands to be purchased, being allocated alongside the route. That work will be completed in April -May.

Branch line in Kazakhstan

Parallely there is work to being run as to kazakstan export capacities to be attracted. Working groups of Azerbaijan and Kazakhstan as per the discussion of the issue on Kazakhstan to be adhered to the project of construction of Main export pipeline Baku-Tbilisi- Ceyhan (BTC) again will gather in February and March, N.Aliyev noted.

By his words it is expected to work out in term Azerbaijan -KaZakhstan agreement, as well as the treaty signed between Kazakhstan and foreign oil companies having operated in that country and being shareholders of oil pipeline company BTC. Only following signing those documents it will be known the terms of joining to Kazakhstan to the project of BTC valued at 2.95 bln Dollars and passing capacity amounted to 50 mln tones of oil a year. At discretion N. Aliyev the process of forming of those documents will be extended up to the end of the current year.

Azerbaijan Kazakhstan negotiations on that issue having been held since the end of November, 2002. The first of their round was held in Baku between the state oil company of Azerbaijan and Kazakhstan national company "KazmunayGas". Such negotiations had completed by the statement of Kazakhstan party on intention of transporting part of own oil alongside BTC.

Upon completion of negotiations the managerial manager on transported infrastructure and servicing projects "KazMunayGaz" Kairgeldi Kabildin had noted that upon his assessments, Kazakhstan will be able to direct into the pipeline BTC up to 20 mln tones of oil a year. At the same time K.Kabildin emphasized that the issue on construction of TransCaspian oil pipeline Aktau-Baku in Kazakhstan will not be discussed. By his words that is connected with "political, ecological and technical motives".

He especially noted that " without the issue to be solved on legal status of the sea beforehand to tell on pipes to be laid on the bottom of the Caspian". We do not insist on that project as well as because that we understand the significance of Caspian ecology protection". - managerial director added. From the other hand, he noted that accounts shows that expenses on the construction of the underwater oil pipeline Aktau-Baku will be purchased just in that case should volumes of transportation of Kazakhstan Oil will exceed 20 mln tones a year. "Less volumes of oil is profitable to deliver to Baku on tankers", - Kairgeldi Kabildin said.

The second round of negotiations held in London and in the latter took part special administration of the USA on issues of energetic policy in Caspian Stiven Mann. In Baku they do not exclude the fact that he will participate at regular round of negotiations so as the USA is lobbing that energy project and Kazakhstan being followed him.

Let us remind that in accordance with the statement of President of the company BP Azerbaijan Devid Woodward, passing capacity of Main Export pipeline BTC might be augmented just by 20% and brought to 60 mln tones a year. Oil extraction in the block "Azeri-Chirag-Guneshli" to 2008 will make up 50 mln tones a year and will allow fully "to load" MEP, passing capacity of which as it is known is measured namely by that figure. By the way, Kazakhstan is counted to pump on MEP 20 mln tones of oil a year, otherwise, more than MEP could take thereof, since its capacity should in that case will make up 70 mln tones a year, but not 60, as it is supposed whilst expanding passing capacity of that export pipeline.