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Construction of Baku - Tbilisi-Jejhan oil pipeline is given start

Construction of oil pipeline will begin in spring (by the end of the first quarter of 2003) and will be finished by the end of 2004. The next round of Azeri-Kazakhstan negotiations under the project of the oil pipeline Baku - Tbilisi-Jejhan will be held in February in Kazakhstan.

Construction of Baku - Tbilisi-Jejhan oil pipeline is given start

Construction of oil pipeline will begin in spring (by the end of the first quarter of 2003) and will be finished by the end of 2004. The next round of Azeri-Kazakhstan negotiations under the project of the oil pipeline Baku - Tbilisi-Jejhan will be held in February in Kazakhstan.

Now the parties conduct preparation of the project of intergovernmental agreement with Kazakhstan petroleum operators for financing construction of the pipeline.

The basis for creation of such transport system was incorporated in 1998 when presidents of Georgia, Turkey, Azerbaijan and Kazakhstan have signed the declaration in support of the project of the oil pipeline Baku - Tbilisi-Jejhan. Then the Georgian International Petroleum Corporation (GIOC), state owned oil company of Azerbaijan GNKAR, Turkish company " BOTAS " and Kazakhstan?s - "Kaztransoil" have signed the agreement on creation of an alliance on development of transport infrastructure.

Georgia with Azerbaijan for a long time support plans of USA on transportation of Caspian petroleum avoiding Russia. These countries do not have necessary amount of petroleum, therefore they actively persuade Kazakhstan to export petroleum not through Russia, but through Georgia and Turkey. Kazakhstan supports the plan diversification of export streams of petroleum.

The first round of Azeri-Kazakhstan negotiations was held at the end of 2002 in Baku. Then representatives of government of Kazakhstan declared readiness to provide for export through the oil pipeline Baku - Jejhan 20 million tons of petroleum per year. These expected stocks were supposed to come from Kazakhstan?s deposit "Kashagan" - the largest in the world in the last decade.

It is expected, that at the first stage of the project, by 2005, Kazakhstan will provide 10 million tons of petroleum for transportation through the oil pipeline Baku - Jejhan. Further the volume of the Kazakhstan?s petroleum can be increased up to 20 million tons.

The project of Baku-Tbilisi-Jejhan provides a lining of a 1752-kilometer pipeline at cost of $2,95 billion, designed on annual capacity of 50 million tons. Through it petroleum from the Caspian region will be delivered to the western markets.

In construction will be engaged American company "Petrofac" and French "SLEEP KAPAG". The Japanese company SumitomM Metals Industry will deliver pipes for construction of the oil pipeline Baku-Tbilisi-Jejhan. The first pipes within the framework of the civil-engineering design of the oil pipeline Baku-Tbilisi-Jejhan were delivered to Baku January 14.

Process of realization of the civil-engineering design of the pipeline Baku-Tbilisi-Jejhan is "transparent". Judging already by the fact that a number of large petroleum companies including Western consider an opportunity of participation in this project. No financial structure would begin allocating credits such expensive project. The circuit of financing of the "bargain of century" provides use of 30 % of the capital of shareholders (about 1 billion dollars) and 70% of external credits (about 2 billion dollars).


Author: Nana Bendukidze