Baku-Tbilisi-Ceyhan pipeline

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Upon completion, the Baku-Tbilisi-Ceyhan pipeline will transport crude oil from the landlocked Caspian Sea oil fields to the Mediterranean. Because of the pipeline the geopolitical significance of the former Soviet republic of Georgia now vastly outweighs its 4 million population in what Westerners saw as a mountainous backwater.

Even before its completion, the pipeline was already foreshadowing its future effect on the balance of the world's oil politics. Moscow first insisted that any pipeline pass through Russian-controlled territory, then affirmed that they saw no economic advantage to Russian participation. Iran and Russia moved closer together, Russia aiding Iran's nuclear program, as both became increasingly concerned about Azerbaijan's and Georgia's willingness to cooperate closely with NATO. A decision to move forward with the pipeline was reached at the meeting of the Organization for Security and Cooperation in Europe (OSCE) in Istanbul on November 18, 1999. A second action at the OSCE meeting, an "intergovernmental declaration of intent" to construct a Trans-Caspian gas pipeline from Turkmenistan to Baku to transport gas to Turkey, evaporated Russian hopes of becoming an essential energy supplier to Turkey.

The pipeline was commissioned from the Anglo-American energy giant BP, in cooperation with a number of smaller oil companies. Construction began in September 2002. The Baku-Tbilisi-Ceyhan pipeline is scheduled for completion in 2005, and a similar, BP-led project to deliver natural gas from Azerbaijan to Turkey, is slated to finish in 2006.

At 1760km long, the pipeline route crosses Azerbaijan and skirts Armenia to pass through Georgia and Turkey, making it the longest oil pipeline in the world. The pipeline will include 8 pumping stations, 2 intermediate pigging stations and 87 block valve stations, and it will be buried for its entire length, making it less vulnerable to sabotage. The pipeline is 42" wide for most of its length, narrowing to 36" wide as it nears Ceyhan.

The pipeline has a projected lifespan of 50 years, and when working at normal capacity, will transport 1 million barrels (160,000 m³) of oil per day.

Funding for the pipeline is largely through the World Bank’s International Finance Corporation and the European Bank for Reconstruction and Development.

Resistance to the pipeline is partly based on ecological issues, a sensitive area for all the extraction industries. Attention focussed on Borjomi national park, an area of mineral water springs and outstanding natural beauty in Georgia. The park's bisection by the BTC pipeline has long been the subject of fierce opposition by environmental activists. Since the pipeline is buried, constructing it leaves 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." The organizers were joined by the Kurdish Human Rights Project though the pipeline does not pass through Kurdish areas.

The influence of oil on politics has not ever historically favored transparent democracies, even in the United States. The transfer of power in Azerbaijan upon the retirement of former president Heydar Aliyev, to his son Ilham, was effected through the medium of an October 2003 election tainted by charges of widespread fraud. The Aliyev patronage structure is solidly behind the pipeline: the State Oil Company of Azerbaijan is headed by Natiq Aliyev, uncle of Ilham Aliyev. In Georgia, president Eduard Shevardnadze's resignation was followed by a January 2004 election that returned Mikhail Saakashvili, the opposition leader, who fervently embraced the project for the international press November 26, 2003: "All strategic contracts in Georgia, especially the contract for the Caspian pipeline, are a matter of survival for the Georgian state," he told reporters.

To counter these objections, Azerbaijan has set up a State Oil Fund, expressly mandated with using natural-resource revenue to benefit future generations, to bolster support from key international lenders.

External links

Reference

  • Daniel Yergin, The Prize: The Epic Quest for Oil, Money & Power. The Pulitzer Prizewinner for history sets oil pipelines in a larger context.

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