"Western" route for Caspian oil seen ready early next year

Sep 14, 1998 02:00 AM

July 14, 1998 The "Western route" for transporting initial oil production from Azerbaijan's sector of the Caspian Sea is expected to be completed on time early next year.
"Work on the pipeline from Baku to Supsa (on Georgia's Black Sea coast) is on schedule and we hope it will be completed in the time foreseen," John Leggate, new president of the AIOC said. Leggate added that after seeing the pipeline, he was pleased with the quality of the work. "After examining the progress of construction, I can say work is being done to international standards," he said.
The AIOC plans to transport first oil through the Western route to international markets in March or April next year.
"The successful completion of the project to transport oil through the Western route is important, not just from the economic point of view, but also politically," Leggate said.
The line, which runs through Azerbaijan and Georgia, will be 850 km long, of which 480 km will be in Azerbaijan. Its capacity will be 115,000 bpd.
Leggate said differences between the AIOC and the Azerbaijan state oil company, SOCAR, on compensation for extra costs of construction of the pipeline wouldn't affect construction work.
Costs have jumped by $ 275 mm from the original estimate of $ 315 million to $ 590 mm because upgrading an existing line in some places proved impractical and whole sections have had to be replaced.

Under a September 1994 deal signed with the government of Azerbaijan, the AIOC will develop reserves of over 500 mm tonnes (over 3.6 bn barrels) of crude from three offshore fields over 30 years, after investing $ 8 bn.

Members of the consortium are: Amoco (17.01 %); Unocal (10.0489 %); Exxon (8.0006 %); Pennzoil (4.8175 %); Turkish Petroleum (6.75 %); Delta Oil (1.68 %); British Petroleum (17.1276 %); Ramco (2.0825 %); LUKoil (10 %); Statoil (8.5633 %); Itochu (3.9205 %), and SOCAR (10 %).
The AIOC currently transports "early" oil from the Caspian by pipeline across Russia to the Black Sea port of Novorossiisk. This year, 1.5 mm tonnes in total will be transported through this "Northern route."

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