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Last Updated: Thursday, 5 May 2005, 22:37 GMT 23:37 UK
Caspian oil set for fast flow to the West
By Kieran Cooke
BBC News in Baku, Azerbaijan

As growing concerns about dwindling global reserves help maintain oil prices close to the $50 a barrel mark, a major supply route linking newly developed oil and gas fields in the Caspian Sea with western markets is due to be opened.

Oil rigs are built outside Baku, Azerbaijan
The pipeline is expected to spark an economic boom in Baku

Within the next few weeks, oil from the Caspian will start flowing into a 1,762 kilometres long pipeline.

The pipeline will run from Baku, the capital of Azerbaijan, via near Tbilisi, the capital of Georgia, and across eastern Turkey to the port of Ceyhan, on Turkey's Mediterranean coast.

The Baku-Tbilisi-Ceyhan (BTC) pipeline is being built by a consortium of companies led by energy giant BP.

The project, costing an estimated $3.6bn (1.9bn), is described by BP as the world's biggest energy scheme.

Just to fill a pipeline of such length with oil will take up to five months.

"Building work is generally progressing on schedule," says a BP spokesperson in Baku.

"We expect to be loading tankers in Ceyhan with Caspian crude before the end of the year."

Volatile region

The pipeline project is highly controversial.

Governments involved have welcomed the project.

Map of region

"The whole region needs this pipeline," says Ilham Aliyev, Azerbaijan's president.

However, from long before work started on the pipeline in early 2003, concerns were raised about running it through such a volatile political region.

In Azerbaijan, the pipeline goes close to the ceasefire line separating the forces of Azerbaijan and Armenia, its neighbour and bitter enemy to the west.

The two countries are locked in a bloody territorial dispute and, despite the ceasefire, clashes often occur.

Unarmed guards

Elsewhere en-route, concern has been raised about the pipeline's vulnerability to attack from anti government groups.

Georgia battles various separatist conflicts, while in Turkey the pipeline skirts the heartlands of Kurdish areas.

"We have secured the pipeline to the highest standards," insists Tamam Bayatly, BP's communications manager in Baku.

"Governments involved are responsible for security. The pipeline is buried and no one will be able to see where it runs.

"Unarmed local people, trained by BP, will guard the length of the pipeline."

Not ideal

Non-governmental organisations have complained.

Hillside homes of refugees
The pipeline will run through regions populated by refugees

Some about human rights being abused, others about the pipeline's environmental impact.

Green groups question the presence of such a project in what is a highly active seismic zone, saying any rupture of the pipeline would cause widespread damage.

In Georgia in particular there have been strong protests about the pipeline's route through the Borjomi Valley, one of the country's most scenic areas and a centre of tourism.

"I cannot say that there are not any problems," says Faig Askerov, who monitors the environmental impact of the project for BP.

"We use technology that makes the minimum impact on the environment. We are not ideal, but we're good."

Power and influence

Western governments and financial institutions have given strong backing to the project.

The United States has given significant political support, seeing the pipeline as a way of transporting vital energy supplies out of the Caspian, avoiding alternative routes to the south through Iran, or to the north through Russia.

But Russia has been unhappy with the project, seeing it as further evidence of the West seeking to exert power and influence in an area Moscow has traditionally seen as its own backyard.

The Caspian Sea's oil and gas riches have long been known, but difficulties in transporting energy reserves to markets outside the landlocked area have been a handicap to further exploration work.

BP says the pipeline is the solution to the problem, but critics say the future is uncertain, insisting that the pipeline is a big gamble in an unstable region.

SEE ALSO
Oil wealth 'can cause corruption'
20 Oct 04 |  Business
Country profile: Azerbaijan
10 Apr 05 |  Country profiles

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