Azerbaijan to finance BTC pipeline with petroleum fund

Dec 05, 2003 01:00 AM

Azerbaijan will spend 9 bn manat (4,918 manat/$ 1 on December 5) from its state petroleum fund on the construction of the Baku-Tbilisi-Ceyhan (BTC) export pipeline in 2004. Samir Sharifov, the fund's executive director, said 95 % of the money would go towards servicing a credit of $ 200 mm that the State Oil Company of the Azerbaijani Republic (SOCAR) received from shareholders of BTC Co., the pipeline project operator. The other 5 % will be spent on administrative costs incurred by AzBTC, which represents the state in the project.
SOCAR will repay the $ 200 mm after international financial institutions have, at the start of 2004, issued other loans for the BTC project. The SOCAR creditors will receive $ 4 mm in interest, according to the agreement.

Some of the interest was paid in 2003, Sharifov said. Another payment is due in January, and the petroleum fund has budgeted for that.
The cost of the BTC project is $ 2.95 bn. According to the concept for financing the project, the participating companies will cover 30 % of the cost, and 70 % will be borrowed. The BTC shareholders used their budget up by the summer of 2003, but no credits had been received from international financial organizations by then. So the shareholders decided to go on financing BTC with their own funds until the credits were released. SOCAR received $ 200 mm credit to finance its share of the project.

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. It is planned to complete construction work in the fourth quarter 2004 and to start exporting Azerbaijani oil from the port of Ceyhan in the second quarter 2005.
BTC project participants are BP (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 %).

Source: Interfax Information Services
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