Georgia guarantees safety for new pipeline

Feb 13, 1997 01:00 AM

Azerbaijan's President Haydar Aliyev has said that a proposed pipeline to ship Caspian Sea oil to world markets would cross Georgia, signalling that a Russian route may not be in the works. "There are several possible routes for the strategic pipeline," Aliyev told a joint news conference with Georgian President Eduard Shevardnadze after the two had met. "It will be laid through the territory of several countries and I think that the pipeline will definitely cross through the territory of Georgia."
The former Soviet republic of Georgia is competing with Russia to be the focus of a lucrative, planned oil pipeline that will send large amounts of regional oil westward.Shevardnadze, in Baku on a three-day official visit, said Georgia would guarantee the full security of any new pipeline across its territory.
Azerbaijan has signed contracts worth around $ 15 bn with Western and Japanese oil firms to develop its massive Caspian reserves, but it will need new pipelines to transport most of the oil to Western markets.
The Azerbaijan International Operating Company (AIOC), a 13-member consortium led by British Petroleum and Statoil, is developing three Azeri Caspian fields and will soon select a route for a new pipeline to carry its main output of 30 million tonnes a year (600,000 barrels a day) by 2005. AIOC officials have said a new pipeline from the Azeri capital Baku to a Georgian Black Sea port is favoured. Turkey has said a northern route to Russian Black Sea oil port Novorossiisk may pose problems due to heavy tanker traffic on the Bosphorus. AIOC's early oil output, to come on line in the third quarter of 1997, will be shipped through two existing pipelines. One runs from Baku and crosses war-shattered Chechnya to Novorossiisk. The other, smaller pipeline goes from Baku to Georgia's Black Sea port of Batumi or neighbouring Supsa.
Other big regional oil projects, including US Chevron and Mobil's giant Tengiz development in Kazakhstan, are also interested in using any new pipelines to send output to world markets.
Aliyev and Shevardnadze also signed an agreement under which Azeri state oil company SOCAR will export part of its own crude oil output by rail via Georgia Sea. The arrangement marks the first real return of Azeri oil to foreign markets. SOCAR officials said that under the first stage of the deal, 600,000 tonnes of oil would be exported via Georgia over an unspecified period of time. Until independence from the Soviet Union in 1991, Azerbaijan supplied diesel and gasoline to other Soviet republics, but it has not substantially exported its own oil to world markets since the 1917 Russian Revolution.

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