Fire-damaged BTC oil line could have 5-week shutdown

Eric Watkins
Senior Correspondent

LOS ANGELES, Aug. 7 -- The Baku-Tbilisi-Ceyhan (BTC) oil pipeline, damaged Aug. 6 by an explosion and fire, could be shut down for as long as 5 weeks, according to a spokesperson for Botas International Ltd. BIL operates the Turkish part of BTC, where the fire took place.

BTC transports 850,000 b/d of oil and condensates to Ceyhan from Azerbaijani fields operated by BP PLC and other companies. According to reports, a 5-week shutdown would mean 30 million bbl not reaching the markets through the line.

The BIL spokesperson also said there was no Azerbaijani oil left in storage from the BTC line as of late Aug. 6. The official, who spoke on condition of anonymity, said they had filled the last tanker at Turkey's Ceyhan terminal and "can't provide any [more] oil."

Those claims were contradicted by a spokesperson for BP, which is in charge of the overall pipeline, who said shipments from Ceyhan were continuing as of early Aug. 7 using oil that had already been stockpiled.

While stating that there was enough stockpiled oil for the tankers already waiting at Ceyhan, however, the BP spokesperson said he did not know how long the stocks would last.

The spokesperson also said it was too early to predict how long the pipeline would be shut down because they would not know the exact damage until the fire is extinguished.

Output at the Azeri-Chiraq Guneshli oil field, which feeds the pipeline, was said to be continuing although the flow was reduced Aug. 7.

A spokesperson for BP Azerbaijan said that most of the oil produced for the line was being stored at a terminal near the field and that some of it was being pumped via alternate routes such as the newly repaired Baku-Supsa pipeline.

Oil exports through the 145,000 b/d line, which links Azerbaijan with Georgia's Black Sea coast, had been suspended since October 2006, when a landslide damaged part of the pipeline near the city of Zugdidi in western Georgia.

Turkish officials have yet to determine the cause of the explosion, saying that can be done only when the fire is extinguished. But a Kurdish rebel group claimed responsibility for the blast and resulting fire on the line.

In a statement dated Aug. 6 and posted on its web site, the People's Defense Force—the armed branch of the Kurdistan Workers' Party, or PKK—said it had blown up the BTC pipeline.

The claim follows a threat by Bahoz Erdal, commander of the People's Defense Force, who last year vowed to attack the pipeline, saying it was at risk if the Turkish military continued what he called its oppressive policies against the Kurdish people.

Although the BTC pipeline does not cross through PKK strongholds, an independent report commissioned last year by BP highlighted the potential threat to the pipeline from hostile forces such as the PKK, which the US has categorized as a terrorist organization.

While the BP report did not name the PKK as such, it said the pipeline faces "a continuing and real threat of attack by hostile actors" in Turkey, more so than the two other countries crossed by the pipeline, Georgia and Azerbaijan.

Still, earlier this week, it was reported that an attack on the BTC line is one of several options under the consideration of separatist groups in Georgia, with specially trained saboteurs ready to undertake such a mission (OGJ Online, Aug. 6, 2008).

Contact Eric Watkins at hippalus@yahoo.com.

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