Caspian pipeline plan moves to feasibility study
BAKU, May 19 (Reuters) - Oil companies building a pipeline from the Caspian Sea to Turkey are focused on completing a detailed feasibility study, a key participant said on Saturday, after initial cost estimates showed the project was viable.
Natik Aliyev, president of Azeri state oil company SOCAR, said the BP-led pipeline partners (BP) needed the engineering study to line up outside investment for the $2.7 billion line from Azeri capital Baku to the Mediterranean port of Ceyhan.
"It is very important for us to finish the study to be able to submit all the documents to international financial institutions for approval and form a scheme of financing for the pipeline," Aliyev told Reuters.
Last week, the eight-member consortium said it was hopeful after presenting initial estimates for the cost of building the 1,737-km (1,100 mile) line to potential investors.
"There are signs that on the basis of cost calculations the project will be able to attract a sufficient level of financing," BP has said in a statement.
Aliyev said the consortium was in talks with Chevron, TotalFinaElf and Alberta Energy on their joining of the project sponsorship before the end of the year and their decision depended on the findings of the engineering study.
BP has said the study will begin in June and is expected to cost about $150 million over 12 months. The pipeline, which will also cross Georgia, is due to be finished by 2004 if necessary financing is in place.
Moscow, which wants oil from the Caspian to be transported through its territory to earn transit fees, has cast doubt over the viability of the Azerbaijan-Turkey pipeline, embraced by Washington seeking to limit Russia's influence in the region.
But consortium members have said they are optimistic about being able to fill the pipeline with a suggested capacity of one million barrels a day with enough oil to make it profitable.
Kazakhstan, potentially the Caspian's biggest crude producer, can also be invited to ship its oil through the line. |
