US Caspian pipeline plan not endorsed by majors

Oct 12, 1998 02:00 AM

A US plan to persuade major oil companies to build a multibillion-dollar pipeline in the Caucasus seems to be failing.
For the past 2 years the Clinton administration has been trying to convince the oil firms to construct the pipeline from Baku, the capital of Azerbaijan, through Turkey to its Mediterranean port of Ceyhan.
Administration officials, congressional aides and oil executives said that the companies will probably decide that the American-backed pipeline is too expensive to build right now. Its cost had been estimated at $ 4 bn.
Instead, the companies are expected to rely on a shorter pipeline already under construction between Azerbaijan to the port of Supsa, to transport the large quantities of oil believed to lie near the Caspian Sea.
Although the proposed route of the US-backed Caspian project was the longest and most expensive, the US was pushing it hard because such a route would guarantee that the oil passed through countries friendly to US interests -- Azerbaijan, Georgia, and Turkey.
The oil companies' decision to choose the shorter route means that Turkey, a US ally, would potentially lose billions of dollar in revenues.

Source: not available
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