"GOLDEN WELD" OF THE EAST AND WEST
Energy corridor of the East and West is one of the most important elements of Baku - Tbilisi - Ceyhan (BTC) pipeline, which is the most important part of the world economy. Major factor of economic development and energy safety providing not only by Azerbaijan, that is major user of the system, but also transit countries.
Azerbaijan and its partners needed 10 years for the fulfillment of its wishes to construct the Major strategy export pipeline Baku - Tbilisi - Ceyhan that is one of the greatest construction and engineer projects of our time. Pipeline with the length of 1 770 km. will provide the safety and surely export from the one million barrels of oil per day from Caspian Sea, and this process will be realized without the increasing of tankers traffic density through the Bosphorus Gulf.
"Guest" for 40 years
The official ceremony of "Golden Weld" held on October 16 by the BTC Co. at Azerbaijan-Georgian border, where the pipe sections connected of Azerbaijan and Georgian sites of Baku-Tbilisi-Ceyhan (BTC) main export pipeline were symbolically welded to each other by the presidents Ilham Aliyev and Michael Saakashvili. The stockholders of BTC Co. are BP Azerbaijan (operator - 30.1%); SOCAR (25.00%); Unocal (8.90%); Statoil (8.71%); TPAO (6.53%); ENI (5.00%); Total (5.00%), Itochu (3.40%); INPEX (2.50%), ConocoPhillips (2.50%) and Amerada Hess (2.36%).
The historical event took place in the Boyuk Kesik village of the Aghstafa region in Azerbaijan bordering with the Gardaban region of Georgia. To this event follows the major event that was the crest structure onto the platform of the Central Azeri (CA) were installed on the strong pulley of platform in the Sea. This will allow to the first oil to flow into the BTC pipeline at Sangachal within the first half of 2005. Then we will need some few months to fill the pipeline along its entire route from Azerbaijan to Turkey and to load the first tanker at Ceyhan in the second half of 2005.
BTC construction activities have made very good. The construction corridor is cleaned per 100% on the territories of three countries. More than 97% of the pipes were welded and over the 70% of the pipes had already been backfilled by soil.
Appealing at the ceremony Michael Townzend, BTC Executive Director, said: "We believe BTC has always been more than just a pipeline. And the weld that is one of 150,000 in BTC brings us a real step closer to the completion of the pipeline in the first half of 2005". He reminded that recently was signed two pcs. of five-year protocols at $60 mln. that provide the safety, environmental protection and social problems. These protocols were signed with the attended of Georgian Prime Minister.
"We have covered Azerbaijan and Georgian borders, which is a sign of long-term liabilities for BTC we have undertaken before these countries. This is a chance given to us as guests for 40-year term and we enjoy this chance effectively", - M.Townzend summed up.
Owners and users of ground areas received the compensation for the utilization of their areas with the pipeline construction and they will be able to use of these areas after the construction completion.
In addition, the project's community investment programme is up and running in all three countries. Overall BTC together with the South Caucasus Pipeline (SCP) will spend some $30 million on community and environmental investment in Azerbaijan, Georgia and Turkey during the construction phase.
Great project
"Baku-Tbilisi-Ceyhan pipeline is an integral part of the petroleum strategy of Heydar Aliyev started in Azerbaijan since 1994. Ten years ago, following signature of the Contract of the Century a new petroleum strategy began to be realized in Azerbaijan. In this period investments amounting to billions of dollars were invested in the country's economy. This extremely important event testifies of that there is a firm belief in the processes taking place in the country, in the future of Azerbaijan", - said the president Ilham Aliyev acting at the ceremony. He said, if the Contract of the Century was not signed in September 20, 1994, it would be impossible to imagine construction of new drilling rigs, creation of infrastructure and certainly, construction of two pipelines - Baku - Novorossisk and Baku - Supsa.
As in Azerbaijan, Georgia so as in Turkey have made a great work in pipeline construction "Baku-Tbilisi-Ceyhan". Particularly he noted that this project in whole shows to world how should be realized the regional cooperation. "Baku-Tbilisi-Ceyhan", "Baku-Tbilisi-Erzurum" and the other energy projects are the greatest in the world.
I.Aliyev stressed that in the recent 10 years SOCAR as well achieved high figure, upgraded and finally, the fact that it possesses most part - 25% in construction of the Baku-Tbilisi-Ceyhan pipeline lays additional responsibility on Azerbaijan.
The activity of the CCIC and Capac-Petrofac companies running construction activities respectively from Azerbaijan and Georgian sides was highly assessed. "Certainly, it would be extremely difficult to realize all of these without participation and activity of the United States of America in this issue. From the very beginning we have felt and are feeling today this support", - marked I.Aliyev. Today Baku-Tbilisi-Ceyhan pipeline is named after Heydar Aliyev. The huge terminal being built in Ceyhan is named after Heydar Aliyev.
Meanwhile, acting at the ceremony the Georgian president Michael Saakashvili said that the recent negotiations between the BTC Co. and Georgia achieved agreement on ecological issues. As it is known, Baku-Tbilisi-Ceyhan pipelines passes through the ecological areas, which are of special importance for the future of Georgia, and the agreement achieved after the negotiations, the means to be allocated will allow carrying out significant work in the resort area of Georgia.
Claimed potential
"Potential of the Caspian Sea taking approximately the 10th place for its oil stocks equals to 20 bn barrels of oil and 640 trn c.m. of gas. And this makes 15% of the total global stocks", - said BTC Co chairman of the board, SOCAR president Natig Aliyev at the ceremony.
He said, Azerbaijan sector of the Caspian Sea contains big oil and gas fields possessing huge stocks. However there is no access to the Caspian region ocean, which complicates transportation of these stocks to international markets, and exactly for this reason, the creation of a new reliable system of export transportation was put to the forefront.
In the forthcoming five years Azerbaijan will achieve of strong development in the field of oil and gas production and this will take place mainly due to large-scale development of Azeri-Chirag-Gunashli (ACG) and the Shah Deniz fields. On September 20, 2004 the third stage of ACG scale development was ratified at the solemn ceremony dedicated to 10th anniversary of the Contract of the Century. Thus, currently daily production from these fields at 140,000 barrels will reach 1 mln barrels in 2008.
Along with this, due to the development of only the first stage of the Shah Deniz field will receive over 400 bn c.m. of gas. Thus, Azerbaijan will turn to a country, which export conventional gas and mainly the Turkish market will be provided with conventional gas through the South Caucasus and Baku-Tbilisi-Erzurum export pipelines and since 2006 - the European market will receive daily 90 bn c.m. of conventional gas. At the same time, Azerbaijan and Georgia as well meet own demands.
Total sum of the investments required for realization of all these projects, including also the present investments, amount to around $20 bn.
N.Aliyev stressed that construction of Heydar Aliyev Baku-Tbilisi-Ceyhan main export pipeline, which will connect the Caspian with the Mediterranean Sea bypassing the Black Sea straits and will make the basis of the East-West energy transport corridor, will finish at the Sangachal terminal. Preliminary activities on oil receive have been fulfilled at more than 72%, in the Ceyhan terminal is 85%.
Creation of a reliable energy corridor opened long-term opportunities for providing the local population in the three countries with work and expansion of the sphere of services. Presently Baku-Tbilisi-Ceyhan pipeline, named after Heydar Aliyev, sites and facilities employ 21,000 men. In Azerbaijan approximately 5,000, in Georgia - 5,000 and in Turkey - 11,000 people are involved in the construction activities and of these around 80% are Azerbaijan nationals. Construction of the pipeline will provide Azerbaijan, Turkey and Georgia with long-term and reliable income flow. This will promote even more involvement of new foreign investments to the region, strengthening of the local potential.
New pipe - SCP
"Baku-Tbilisi-Ceyhan project connects the region's countries with the entire world. This project has been realized for already tem years. During this time significant technical successes have been achieved. We have achieved engineering-construction successes at an extraordinary level. A pipeline of over 1700 km is being laid in accordance with the global standards", - said USA State Department Counselor for Energy Diplomacy of the Caspian pool, ambassador Steven Mann. He said, USA rendered support to realization of the project.
"Realization of Baku-Tbilisi-Ceyhan (BTC) pipeline construction project is a great achievement for Azerbaijan, Georgia and Turkey. USA is proud of that it managed to support this project", said the USA State Department Counselor for Energy Diplomacy of the Caspian pool, ambassador Steven Mann to journalists.
At the same time USA State Department rep marked that USA attaches great importance to the given project's aspects concerning the pipeline's safety. "We worry of the given pipeline's safety. However we know that bot the countries and companies-hosts of the project regard this issue very seriously", - said S.Mann.
Concerning the given project's profitability without Kazakh oil, the diplomatist expressed confidence in that "even without Kazakh oil BTC will be profitable". However the diplomatist noted that he believes in Kazakhstan's participation in transportation of own oil via Baku-Tbilisi-Ceyhan pipeline.
Among other alternative routes of transportation of the Caspian oil, besides the Russian direction, S.Mann named the Kazakhstan-China pipeline. The ambassador marked that USA backs the given pipeline project. "This is a good project", - he said. "At the same time USA is always against the pipelines through Iran - this is our position", - stressed USA State Department rep.
According to Ministry of Energy and Fuel of Georgia Nika Gilauri the pipeline construction "Baku-Tbilisi-Erzurum" will satisfy the needs of Georgia in gas.
BP, as Technical Operator of the South Caucasus Pipeline (SCP) gas export project, announced on behalf of the SCP partners that the project has commenced physical construction activities for the Azerbaijan section with the start of the main spread welding. This follows the completion of the main spread welding activities for the Azerbaijan section of the Baku-Tbilisi-Ceyhan (BTC) oil export pipeline. The stockholders of SCP Co. are BP (technical operator - 25.5%), Statoil (commercial operator - 25.5%), SOCAR (10%), LUKAgip (10%), NICO (10%), Total (10%), and TPAO (9%).
The welding began at kilometer point 213 approximately half way between Sangachal and the Azerbaijan/Georgian border and marks the culmination of excellent efforts from teams in Azerbaijan, Georgia, Japan, Malaysia and the U.K.
The pipe lay contractor for the 443 km long Azerbaijan section of SCP, running from the Sangachal Terminal to the Georgian border, is CCIC. The remaining 250 km section of the pipeline through Georgia to the Turkish border will be constructed by the Spie Capag Petrofac Joint Venture.
The main spread welding is expected to continue for another 10 months during which approximately 39,000 joints will be welded for the Azerbaijan section. The Georgian section of the SCP will require 22000 pipe joints. It is planned to complete the overall construction of the SCP by the fourth quarter of 2005.
Each pipe is 42" in diameter and 11.6 metres per joint in length. The pipe is supplied by Sumitomo Corporation, who are providing all of SCP pipe for both Azerbaijan and Georgia.
Rob Kelly, BP Vice-President for Shah Deniz, says: "A great deal of hard work is behind us starting from Japan with the manufacture of the pipe and ending in the pipe storage yards in Azerbaijan and Georgia. But there is even much harder work ahead of us to complete this important regional export pipeline on schedule to deliver First Gas to our customers in time."
The South Caucasus Pipeline (SCP) will take gas from Azerbaijan through Georgia to the Turkish border. It is being built by the same BP Project Team using the same pipe lay and facilities contractors, and in the same corridor as, Baku-Tbilisi-Ceyhan (BTC) oil export pipeline. This is to minimize the environmental and social impact and to achieve capital and operating cost saving synergies.