30-05-00 Irakli Kelbakiani, vice president of the Georgian International Oil Company (GIOC), said that his company had struck a deal on the overhaul of a pipeline that will be used to carry oil from the Tengiz field in Kazakhstan.
The Azerbaijan International Operating Company (AIOC) will work with GIOC to repair and clean a 190 km pipeline from Khashuri, in Azerbaijan, to the Georgian Black Sea port of Supsa, Kelbakiani said. He did not say when the link might be completed. He did state, however, that the AIOC, which was set up to develop the Azeri-Chirag-Guneshli concession in the Azerbaijani section of the Caspian Sea, had agreed to provide $ 18 mm for the pipeline project.
It is not clear why the consortium might participate in the building of a conduit for oil not its own, and as of press time the AIOC had not confirmed Kelbakiani's statement. Neither had TengizChevroil (TCO), the US-Russian-Kazakhstani joint venture that is developing the Tengiz field.
It is also not clear why TCO might choose this transport option when another pipeline, one with a much higher capacity -- the Caspian Pipeline Consortium (CPC) line from Tengiz to Novorossiisk -- is due to come on line next year. Indeed, it sounds as if using the Khashuri-Supsa link could prove to be quite a bother for TCO.

Kelbakiani said that the Kazakhstani oil would have to be delivered to Khashuri by rail (presumably after shipment across the Caspian Sea from Aktau to Baku by tanker). This arrangement would require multiple transhipments, which would turn increase transportation costs.
One advantage of the Khashuri-Supsa route, however, is that plans are afoot to build an oil refinery in Supsa, meaning that TCO could eventually send some of its crude to the Georgian port for processing and then export the resulting products across the Black Sea. It is not known whether the GIOC's discussions with the AIOC were in any way connected to TCO leader Chevron's earlier proposal for the construction of a pipeline for Tengiz oil from Baku to Batumi.