Volume 3, issue #21 - 31-08-1998

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Consortium plans 750 mile TransCaspian gas pipeline

June 30, 1998 A new 750-mile pipeline system that will transport natural gas from Turkmenistan to markets in Turkey and Europe is planned by a consortium of major energy, investment and construction companies.
The cost of developing the pipeline is estimated at $ 2.4 bn with a construction period of 3 years.
The consortium consisting of Amoco and a new pipeline joint venture owned by affiliates of GE Capital and Bechtel Enterprises.
The project, named the TransCaspian Gas Pipeline System, will involve engineering, design, procurement and construction of a gas export pipeline from a point near Turkmenbashi in Western Turkmenistan and extending across the Caspian basin to a landing point near Baku in Azerbaijan. The pipeline route will continue across Azerbaijan and Georgia to Erzurum in Turkey, where it will be linked into the principal Turkish gas transportation grid.
Initial gas supply for the line will originate in eastern Turkmenistan. Consortium officials anticipate, however, that capacity in the TransCaspian Pipeline could also be made available to suppliers of additional gas. The line will initially be capable of transporting about 350 bn cfpy of gas but will be capable of expansion, enabling it ultimately to transport up to 1,225 bn cfpy for delivery to markets in Turkey and Europe.
The pipeline project was conceived initially in 1997 by Bechtel.
Working with BOTAS, the Turkish national oil and gas pipeline company, Bechtel has completed technical and economic feasibility studies for the project. A full briefing on the project for the Turkish Ministry of Energy and Natural Resources is expected to be completed soon.
"Turkish approval is essential for us to be able to move this project forward," said Edward Smith, CEO of the new GE/Bechtel Enterprises joint venture. "We are also initiating talks with the governments in other countries along the proposed route to secure the approvals and support needed in these jurisdictions."
Smith added that other parties would probably be asked to join the consortium as the project got under way. This could include Turkish state and private companies and the state companies of Turkmenistan, Azerbaijan and Georgia as well as other global investors.
"As world demand for energy grows, new sources of supply must be developed," Smith said. "The TransCaspian Pipeline will help achieve this and will be a major advantage for the entire region. It means more jobs and economic opportunities for Turkmenistan and its people. In addition the people of the transit countries such as Azerbaijan and Georgia will benefit from the pipeline's construction and operation."
Mick Jarvis, Amoco's manager of Gas Business Development for Turkey said, "From Amoco's perspective this project exactly fits our business strategy of involvement in bringing long term energy solutions to the Turkey market, as well as strengthening our overall presence in Caspian Region projects."