Azerbaijan May Expand Carrying Capacity of BTC Pipeline

Oil&Gas Materials 23 April 2008 15:13 (UTC +04:00)

Azerbaijan, Baku, 23 April / Trend / Azerbaijan may expand the carrying capacity of the Baku-Tbilisi-Ceyhan (BTC) pipeline to 2mln barrels of oil per 24 hours (100mln tons per year) from current 1mln barrels, high-ranking official in the State Oil Company of Azerbaijan (SOCAR), which is a side to the BTC project, said on 23 April.

"Expansion of BTC's carrying capacity to 1.2-1.6mln barrels or 2mln barrels per day is being discussed. The negotiations are comprehensive and cover the period and methods of expansion," he said.

BP, the operator of the project, has commenced the expansion of carrying capacity of the pipeline from 1mln barrels per day to 1.2mln barrels. Construction for a facility to inject chemicals into the pipe within the Sangachal terminal complex, where BP's main pump station (PSA1) is located, will commence soon.  It aims to expand BTC's design capacity. Construction works will be carried out by Azfen JV (SOCAR - 60% and Turkish Tekfen - 40%). At present, BTC pumps some 750,000 barrels of oil per day with the nominal capacity of pipeline reaching 1mln barrels. The pipeline is expected to pump1mln barrels of oil per day by the end of the year.

According to SOCAR representative, interests of the BTC project's shareholders differ regarding the expansion of the carrying capacity.

"We think expansion of BTC should not negatively affect our [Azerbaijani] share in the project, after the project is completely repaid in 20s," he said. Azerbaijan's share depends upon the volume of pumped Azerbaijani oil via ВТС. If the pipeline is expanded Azerbaijan's share may drop because other volumes of oil to be pumped will appear.

"Expansion of BTC should not take place without growth in production of Azerbaijani oil in order to retain the country's share in the project after it is repaid," SOCAR representative said.

Increasing the capacity of pipeline is quite necessary for transportation of increasing volumes of export of Azerbaijani light oil and the oil of other Kazakh producers. The American ChevronTexaco, one of shareholders of BTC and a part of the project on development of Azeri-Chirag-Guneshli field, has expressed its interest in transporting its oil via the pipeline produced in Tangiz field. The oil is expected to be shipped by tankers along the Caspian to Baku, to be pumped through BTC to the Turkish Ceyhan port in Mediterranean Sea.

The total length of BТС is 1.768km, including the 443km section running via Azerbaijan, the 249km section via Georgia and the 1.076km via Turkey. Construction of the pipeline was commenced in April 2003 and it was filled with oil on 18 May 2005.

A total of $4bln has been spent for the construction of BTC 1,768km pipeline, not including the fulfilment of the pipeline, financial expenses and payment of the bank rates. The credit allocated for the project totalled $2.6bln.

BTC Company Shareholders includes: BP (30.1%); AzBTC (25%); Chevron (8.90%); Statoil Hydro (8.71%); ТРАО (6.53%); Eni (5%); Total (5%); Itochu (3.40%); Inpex (2.50%); ConocoPhillips (2.50%) and Amerada Hess (2.36%).

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