Washington pledges support for trans-Caspian gas pipeline

Aug 14, 1999 02:00 AM

John Wolf, the Clinton administration's special advisor for Caspian energy issues, has said that the U.S. Export-Import Bank and Overseas Private Investment Corporation (OPIC) would help secure financing for the construction of the trans-Caspian gas pipeline.
The Eximbank and OPIC will actively participate in the creation of a financing mechanism for the project, he said, without elaborating.
Wolf was speaking after the signing of three documents designed to speed the project along, including the partnership agreement between PSG, the consortium that will build and operate the pipeline, and Shell.
Several days later, James Rubin, a spokesman for the U.S. State Department, said that Washington was pleased that the agreements had been signed. The accords "mark an important step forward in the U.S. government's efforts to develop the trans-Caspian Gas Pipeline as a cornerstone of the East-West energy transit corridor," Rubin said in a statement.
Top American officials have long been a supporter of the trans-Caspian pipeline project, not least because they hope to see Turkmenistan and other states in the Caspian region export oil and gas to Turkey rather than via Iran.
Transit country Azerbaijan, for its part, also voiced support for the project. Natik Aliyev, the president of the State Oil Company of Azerbaijan, told reporters on August 6 that the pipeline could carry Azerbaijani as well as Turkmen gas to the Turkish market. The parties involved must consider proposals to make the pipeline big enough to carry gas from both countries, he said. Aliyev did not comment on speculation that the Turkish market will not be able to absorb gas from both countries as well as Russia, currently a major supplier.
PSG and Shell are planning to build the trans-Caspian pipeline along a 3,000-km route from gas fields in Turkmenistan to Erzurum, in eastern Turkey. The section from Turkmenbashi to Baku will be laid beneath the floor of the Caspian Sea, and the overland section from Baku to Erzurum will follow the route of the planned Baku-Ceyhan oil export pipeline. It is not yet clear how much the project will cost. Estimates range from $ 2 billion to $ 4 billion or more.

Source: NewsBase
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