Turkey unveils Baku-Ceyhan plans

May 30, 1999 02:00 AM

A group of Turkish officials travelled to Baku recently to discuss plans to build a high-capacity oil pipeline from the Azerbaijani capital to Ceyhan, a port on the Turkish Mediterranean coast.
The delegation met on May 26 and 27 with members of the Azerbaijan Working Group, which includes representatives of the Azerbaijan International Operating Company (AIOC) and the Azerbaijani government.
Among the issues slated for discussion were cost guarantees and agreements with transit countries. The Turkish delegation presented its proposal, described by the Energy Ministry in Ankara as a "lump-sum, fixed-price turnkey contract", to the working group at the meeting.
Details on the Turkish proposal were scarce, but according to one report Ankara has upped its price for construction of the pipeline. Turkish officials have for months insisted that the pipeline would only take $ 2.4 billion to build, not $ 3.5 billion or more as per the AIOC's estimate. Once Ankara agreed to assume all costs of the project over and above $ 2.4 billion, the international consortium slowly began to show itself more willing to agree to construction of the pipeline.

However, Turkish Energy Under-secretary Yurdakul Yigitguden said that the cost could not be cut below $ 2.65-2.70 billion if Botas were to meet the specifications set by the AIOC. Consortium officials, who have been consistently reluctant to commit themselves to the Baku-Ceyhan project, have not yet responded to Yigitguden's statement.
Separately, the Turkish Energy Ministry announced that the next round of negotiations on the pipeline project would take place in June. The Ministry said in a statement that negotiations on finalising the commercial proposal, intergovernmental agreement and host-government agreement for the project would take place at the next meeting, which is to be held in Ankara on June 4.

Turkey's Energy Minister Ziya Aktas, who did not go to Baku with the delegation, said before the meeting that he was satisfied that the project was moving forward. The AIOC is willing to let Turkey's state pipeline concern Botas build the pipeline, Aktas said. He also noted that Ankara and Baku had already reached an agreement setting the cost of the pipeline at $ 2.4 billion and obligating Turkey to cover any costs over and above that amount.

Source: NewsBase
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