The Hindu : Indian firm acquires stake in Caspian oil pipeline project

Online edition of India's National Newspaper
Thursday, Nov 07, 2002

International

International

Indian firm acquires stake in Caspian oil pipeline project

By Atul Aneja

ANKARA NOV. 6. Focused on becoming a player in the world energy market, India, in partnership with Turkey, has acquired a foothold in a $ 4.2 billion pipeline project that will bring the Caspian Sea oil to the Mediterranean coast.

India will participate in the Baku-Tblisi-Ceyhan (BTC) pipeline project that will bring crude oil from Azerbaijan, in the Caspian zone, to Ceyhan, on the Turkish Mediterranean coast.

The BTC pipeline, which was on the drawing board since 1997, is being built under considerable U.S. pressure. It is, in part, a product of geopolitical rivalry between Washington and Teheran.

Keen on denying Iran any leverage in the transportation of oil and gas from central Asia and the Caspian area, Washington has insisted that new transportation corridors that are being drawn from this resource-rich region should avoid Iranian territory, even if this temporarily adds to transportation costs.

The move to isolate Iran has benefited Turkey, Washington's trusted North Atlantic Treaty Organisation ally, as the latter will now become a key gateway for exporting a part of the huge Caspian reserves, estimated at 230 billion barrels.

The groundbreaking ceremony for the project took place on September 20 at the oil terminal of Sangachal on Azerbaijan's Caspian shore.

The BTC pipeline, prior to entering the Turkish territory, will also pass through Georgia.

Punj Lloyd, a New Delhi-based company, in partnership with a Turkish firm, Limak, has bagged the order for constructing 332 km of the pipeline, out of a total length of 1,750 km. The joint venture where both sides will together chip in $ 93.5 millions will involve construction of the pipeline from the Turkish town of Ulas to the Ceyhan terminal.

The Indian firm will mainly oversee construction, especially with an eye on preventing ecological damage and pool in machinery with its counterpart, while most of the 900-strong workforce will be Turkish.

The Ulas-Ceyhan stretch of the pipeline will cut across hazardous terrain, which will involve bisecting seven rivers and negotiating the steep Kocadag and Taurus mountain ranges.

The BTC pipeline project, which is under the management of an international consortium led by BP Oil and the State Oil Company of the Azerbaijani Republic (SOCAR), is expected to transport 800,000 to one million barrels a day at its peak.

Other oil majors involved in the project include the French TotalFinaElf and Italy's ENI, and there have been reports that the U.S. energy giant Chevron is also negotiating for a stake.

Apart from the BTC, the India-Turkey energy cooperation also includes oil exploration as India's Oil and Natural Gas Commission (Videsh) and Turkish Petroleum Company (TPAO) have decided to jointly look for oil in Libya.

India's recent efforts to become an international energy player include participation in the Sakhalin project in Siberia, Russia, where it has pitched in $ 1.1 billion.

It is currently negotiating a deal for tapping oil in the promising Kurmangzy field in Kazakhstan.

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