Darius V. Snieckus
OGJ Online
BAKU, June 6 -- The US Trade and Development Agency expects to grant the newly formed Azerbaijan Ministry of Fuel and Energy $600,000 for a feasibility study on the upgrading of two refineries and the Port of Dubendi to handle lower grade crude from Kazakhstan, Turkmenistan, and Russia.
Completion of the project would free Azerbaijani crude being processed at the refineries for export through the Baku-Tiblisi-Ceyhan pipeline, construction of which is scheduled to get underway in the second half of next year.
The study will also mull the options for boosting transshipments of crude across the Caspian Sea via the port.
Steve Mann, the recently appointed senior advisor for Caspian energy diplomacy at the US Department of State, and Azerbaijan Minister of Fuel and Energy Mejid Kerimov were expected to sign the grant Wednesday.
The ministry will chose a yet-unnamed US company to conduct the study. Investment in the modernization projects is expected to total $100 million, with potential exports of US goods and services of between $50-80 million, according to the US Embassy in Baku.
Mann stressed that the grant was in keeping with Bush administration policy of promoting development of an East-West energy corridor in the Caspian region. He said TDA has spent more than $5 million in support of the corridor and predicted, "The Baku-Ceyhan pipeline will be built."
He said concerns were unfounded that the high cost of building the BTC pipeline, put at around $2.8 billion, would derail the project.
"When we look at Baku-Ceyhan and the cost issue, we need to take a very stable, sober view -- and this is the view that the companies take -- that the project will come in at a commercially supportable cost.
"Progress on the pipeline has moved ahead, and US government support of the pipeline has been constant," he added.
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