Officials inaugurate U.S.-backed pipeline

United Press International
May 26 2005

Officials inaugurate U.S.-backed pipeline

By Andrea R. Mihailescu May 26, 2005, 13:10 GMT

WASHINGTON, DC, United States (UPI) — Officials Wednesday began
filling the U.S.-backed $3.6 billion Baku-Tbilisi-Ceyhan oil pipeline
transporting Caspian crude to western markets.

Leaders from Azerbaijan, Kazakhstan, Georgia and Turkey inaugurated
the pipeline at the opening ceremony at an oil terminal near the
Azeri capital of Baku. Despite opposition to the pipeline, a few
Russian representatives were present at the ceremony.

The pipeline received opposition from many. Opposing any route that
would bypass Russian territory, Russians unsuccessfully lobbied for
their own pipeline route passing through Chechnya and Novorossiysk.

Iran also expressed its dissatisfaction with the pipeline as it
sought its own territory as the optimum route for the passage of
Caspian oil.

For Arab monarchies, an alternative source of energy resources on the
global market was a serious blow.

“We have managed to do this. We have done it,” Azeri President Ilham
Aliyev said during the opening ceremony. “Some people didn`t think it
was possible, some treated the project with suspicion, while others
even wanted to impede this. But none of these worked. Thanks to our
friends and neighbors — the union of Turkey, Azerbaijan and Georgia
— the assistance of the U.S. to the project … ”

Although the 1,100-mile pipeline may alleviate some western
dependence on Middle East oil, the BTC faces a number of security
challenges. One of the major challenges is the potential escalation
over Nagorno Karabakh, which was overtaken by ethnic Armenian
separatists over a decade ago. Other issues include possible crime
along the BTC`s route such as local tapping into the pipeline or
environmentalists attack it.

In August, Azerbaijan, Georgia and Turkey will conduct joint
exercises in an effort to ensure the security of the pipeline,
according to the Georgian defense ministry. The militaries of the
three countries will receive training on how to prevent terror
attacks, acts of sabotage and environmental catastrophes along the
pipeline route. In case of sabotage or an environmental catastrophe
on the territory of either of the transit countries, the military of
the other two countries will provide assistance.

“Longstanding U.S. policy has been that the governments of the region
are responsible for the security of the pipelines on their
territory,” Steven Mann, senior U.S. official responsible for Caspian
pipelines, told UPI. “The United States can provide training and
advice, but pipeline security is a national responsibility.”

Georgia hired the Northrop Group to develop an aerial monitoring
system along the pipeline`s route and its adjacent area. Georgia
received radar systems similar to those the U.S. currently uses in
Afghanistan, according to Giorgi Chanturia, president of the Georgian
International Oil Corporation.

The pipeline has a capacity to transport approximately 50 million
tons annually. Currently standing at 95 percent completion, it will
take 10 million barrels to fill the pipeline before pumping can
begin. Under the agreement, the pipeline project is supposed to be
completed in the first six months of 2005. For each day late,
contractors would have to pay a fine of $500,000.

Energy experts believe the pipeline contains the world`s
third-largest oil and gas reserves.