Crude export volumes from Turkmenistan and Kazakhstan through the Baku-Tbilisi-Ceyhan (BTC) pipeline are going to increase over the following 3-7 years, head of the strategic development and investment projects’ department at the Azerbaijan Caspian Shipping Company, Tariyel Mirzayev, said on April 27 during the ‘’3rd SOCAR International Caspian and Central Asia Downstream Forum on Trading, Logistics, Refining, Petrochemicals’’, held in Baku. The aforementioned rise is expected to be achieved after the addition of a number of new tankers to the Azerbaijan Caspian Shipping Line. The construction of these tankers will have been finalized by the end of 2019. Oil and petroleum products constitute a large portion of the cargo carried by the Azeri fleet, trundling along the Aktau-Baku and the Turkmenbashi-Baku routes, up to Sangachal and Dubendi oil terminals on the Caspian Sea.
The 1,768km-long BTC (443km in Azerbaijan, 249km in Georgia and 1,076km in Turkey), with an overall cost of $4bn, links the Azeri-Chirag-Gunashli (ACG) oilfield cluster (Sangachal terminal) to the Ceyhan terminal on the Mediterranean coast of Turkey. The pipeline, that became operational in 2006, has a throughput capacity of 1Mbbl/d (50Mt/a) and facilitates Caspian oil shipments’ arrival predominantly on the Western markets, taking pressure off Turkey’s tanker-clogged Bosporus straits.
Successful completion of BTC ensued from a turnaround in the US foreign policy on the Caspian in the aftermath of the landmark ‘’Contract of the Century’’, which signified Azerbaijan’s strong westward oil trade potential, as well as the first Chechen War, which illustrated Russia’s military power in the region. The guarantee of uninterrupted oil flows to its major trading partners and the prospects for economic benefits and political stability for the three involved countries, traditionally plagued by separatist conflicts, were the two goals prioritized by Washington by means of the BTC implementation. Therefore, it is no wonder that ExxonMobil recently acquired a 2.5% stake in the pipeline consortium, following Chevron, ConocoPhilips and Hess Corporation (current BTC Co. shareholding: BP: 30.1%, AzBTC: 25%, Chevron: 8.9%, Statoil: 8.71%, TPAO: 6.53%, Eni: 5%, Total: 5%, Itochu: 3.4%, Inpex: 2.5%, ExxonMobil: 2.5%, ONGC: 2.36%).
The pipeline also plays a great part in the strengthening of the trans-Caspian oil ties, at a moment when the natural gas alternative, namely the Trans Caspian Gas Pipeline (TCGP), remains a bone of contention due to the Russian-Iranian objections over its realization prior to the settlement of the Caspian legal status and the long-lasting Azeri-Turkmen dispute over the Kyapaz/Serdar hydrocarbon deposit, lying in the middle of TCGP’s way. In particular, Turkmenistan resumed oil transportation via BTC in 2018 under a new contract signed in October 2017 with SOCAR, providing for the supply of 3-4Mt, equal to 100% of the country’s oil export. As for Kazakhstan, even though, according to Azerbaijan’s Energy Ministry, it has resumed oil exports from the Aktau port via BTC since early 2017 (previously suspended since the second half of 2015), no contract has yet been inked. As was stated by the Kazakh Deputy Energy Minister Magzum Mirzgaliyev in November 2017, the country’s oil producing companies are still pondering on the economic viability of this route for the transportation of oil from the giant Kashagan field. Finally, Azerbaijan, who lowered pumping via BTC by almost 8% between January and September 2017, compared with the respective period of 2016, has also won itself an important outlet for domestically produced oil thanks to the Turkey pipeline.
Clearly, BTC, along with other Azeri oil lines like the Baku-Supsa and Baku-Novorossiysk, can all accommodate extra oil quantities. The news that a rise in oil transit via BTC is due in the years to come points out to the promising future for the further growth of the crude-oil tanker fleet in the Caspian.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-may-3-2018/#4
Comments