Baku-Tbilisi-Ceyhan credit agreement to be financed in January

Dec 10, 2003 01:00 AM

BTC Co. and financial organizations are to officially sign a credit agreement to finance the Baku-Tbilisi-Ceyhan pipeline project in January 2004, a source in BP-Azerbaijan told.
"Preparation of all documentation regarding the organization of financing for the project has virtually been completed. The BTC Co. board of directors is to hold meetings in London … at which it will confirm a packet of agreement concerning financing for the project," the source said. After this it is planned to officially sign the documents for the financing of the project, the source said. All creditors of the project, BTC Co. shareholders and the governments of Azerbaijan, Georgia and Turkey will sign a single agreement. It is planned to sign this agreement in January 2004.

The total amount of funds attracted for the project, including interest rates, will amount to $ 2.5 bn, with a total project cost of $ 3.6 bn. Direct construction costs will amount to $ 2.95 bn, of which 30 % will be invested by shareholders and 70 % will be received as credits. Other expenditures include about $ 250 mm to acquire 10 mm barrels of oil to fill the pipeline, and servicing of credits.
Creditors for the project break down into four groups. Firstly we have international financial organizations (the European Bank for Reconstruction and Development and the International Finance Corporation), which will provide their own funds in addition to guarantees for credits from commercial banks.

The second group includes export-credit agencies that will provide guarantees to commercial banks to finance supplies of materials and equipment from six economically developed countries -- the US, Britain, Japan, Germany, Italy and France.
The third group includes 10-30 commercial banks and the fourth group includes participants in the project -- BP, Statoil, Total and ConocoPhillips, which may pay out a total of $ 800 mm.
Participants in the BTC project are: British Petroleum (30.1 %), SOCAR (25 %), Unocal (8.9 %), Statoil (8.71 %), TPAO (6.53 %), ENI (5 %), Itochu (3.4 %), ConocoPhillips (2.5 %), Inpex (2.5 %), TotalFinaElf (5 %), and Amerada Hess (2.36 %).

The future pipeline will stretch 1,767 km (443 km through Azerbaijan, 248 km through Georgia and 1,076 km through Turkey) and will have a capacity of 50 mm tpy of oil and will require 1.5 mm tons of oil to fill it. The cost of the project is estimated at $ 2.95 bn.
It is planned to complete construction work in the fourth quarter 2004 and to start exporting Azerbaijani oil from the port of Ceyhan in May 2005.

Source: Interfax Information Services
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