Engineering wonder takes oil the long way round
by Oliver Poole in Ceyhan
The Daily Telegraph (LONDON)
July 14, 2006 Friday
AT 1,100 miles long, crossing mountain ranges and 1,500 waterways,
the Baku-Ceyhan pipeline has been hailed as the first engineering
wonder of the 21st century.
A decade after it was conceived it finally opened yesterday at the
eastern Turkish port of Ceyhan.
An epic feat of construction that cost pounds 2.4 billion and employed
up to 22,000 workers at a time, the pipeline will ensure that the
precious reserves of the Caspian Basin – believed to be the largest
remaining oil deposit outside the Middle East – can now be pumped to
the edge of the Mediterranean and shipped on for the European market.
Starting in Baku, the capital of Azerbaijan, the pipeline passes
through Tbilisi in Georgia before reaching Ceyhan, where it is
expected that a million barrels of crude oil will arrive each day
when the pipeline is working at full capacity.
Although it was two years behind schedule and pounds 600 million over
budget, the pipeline was hailed at an opening ceremony in Ceyhan
yesterday, where the presidents of the three countries were joined
by the head of BP, which leads the consortium that built and runs
the pipeline.
As the heads of state and hundreds of dignitaries watched, oil was
pumped into a tanker, the British Hawthorn, to be taken to Genoa in
Italy. Lord Browne, the chief executive of BP, described it as an
"historic achievement".
It is certainly an impressive engineering feat. Some 150,000 pipes
were used and all were buried to avoid sabotage or theft. Each barrel
of oil takes about a year to make the journey from Azerbaijan to the
terminal in Turkey.
Its scale has more to do with geopolitical reasons than commercial
ones. A simpler route would have taken the oil from Baku through
Russia to the Baltic Sea or via Iran to the Persian Gulf. Neither
was acceptable to the United States, which insisted that "strategic
importance" had to be a priority.
Therefore the route west was chosen through "friendly" countries. It
first heads north-west as Azerbaijan is officially at war with its
western neighbour Armenia over a disputed border. Then it wiggles west
to avoid Georgian separatist movements, before taking a large detour
around Turkey’s troubled Kurdish regions in its eastern provinces
before finally going south.
The project was so politically charged that it has been alleged that
US backing for Georgian democrats in the country’s Rose Revolution
was due to the previous regime’s sudden cooling in its enthusiasm
for the project.
There was also little diplomatic support for pro-democracy activists
when Azerbaijan’s government remained in power last year after disputed
election results.
Russia was reportedly so angry at being snubbed that in 2003 it was
accused by Georgia of training ecological saboteurs to damage the
pipeline. It is also attempting to expand its existing pipeline from
the Caspian.
Michael Townshend, the executive in charge of the BP project, said
yesterday that the result had been worth the effort as its completion
would help ensure the West’s "energy security".
"The project will export around one per cent of world oil production
so in that respect it is fairly small," he said. "But where it becomes
important is that it is a new source of energy from a non-Opec source
and that means diversification.
"And that one per cent is 25 per cent of the expected increase in
the demand for oil over the next four years."
A gas pipeline following an almost identical route is scheduled
to be completed by the end of this year. That will make it harder
for Russia to use its gas reserves for political leverage with its
neighbours and Europe as it did last year when it temporarily shut
off supplies to Ukraine over a pricing dispute.