Tariff for Piping Oil via BTC in 1st Quarter Exceeded Expectations

Oil&Gas Materials 6 April 2007 18:49 (UTC +04:00)

Azerbaijan, Baku/ Trend , corr. I. Khalilova/ The tariff for piping one barrel of oil via the Main Export Pipeline of Baku-Tbilisi-Ceyhan (BTC) in the first quarter of 2007 reached $6.7, exceeding the preliminary expectations of $0.7, a source in the Azerbaijani Government told Trend today.

BTC is carrying oil produced by AIOC (Azerbaijan International Operating Company) from the Azerbaijani offshore oil bloc fields of Azeri-Chiragh-Gunashli.

The tariff for piping oil via the mentioned pipeline changes depending on the volume of oil to be exported. The increase in oil being piped via the BTC brings a reduction in the tariff. From the tariffs, Pipeline Company BTC Co first compensated all operational, maintenance, and overhaul services, as well as other kinds of expenditures.

The government source does not rule out that by the end of 2007, the tariff for piping a barrel of oil via BTC may be less than $6 due to the increase of crude export via the pipeline.

The same source also noted that the average export price for light crude shipped from the Turkish Mediterranean Sea Port of Ceyhan on FOB terms in the first quarter reached $57.7 per barrel.

The State Budget expects returns from the AIOC profits gained from the tax after 25 April.

Notably, in 2006, on average, the BTC Pipeline carried 300,000-400,000 barrels of oil per day. In 2007, this volume is expected to increase up to 600,000-700,000 barrels of oil per day. BTC Co has already increased the capacity of the pipeline up to 1 million barrels a day.