SCP line open; BTC, WREP lines remain shut down

Eric Watkins
Senior Correspondent

LOS ANGELES, Aug. 14 -- BP PLC has restored exports of natural gas from Azerbaijan into the South Caucasus Pipeline (SCP), but said the 150,000-b/d Western Route Export Pipeline (WREP) remains shut, as does the 1 million b/d capacity Baku-Tbilisi-Ceyhan (BTC) oil pipeline.

"We hope to restart the pipelines as soon as the situation becomes safe," said a BP spokesperson, who declined to predict when that would be.

The announcement coincided with reports that Russia, amid accusations that it targeted pipelines and is deliberately blocking oil shipments out of Georgian ports, has offered to increase the amount of crude oil it can carry from Azerbaijan along the Baku-Novorosiisk pipeline.

Operations at the SCP and WREP were suspended Aug. 12 as a precaution after reports that Russian bombs fell near them and the Georgian sector of the BTC during hostilities in Georgia. The BTC line was shut earlier following an explosion and fire in the sector running through Turkey.

BP and its partners, forced to cut output more than fourfold at their Azeri fields from the usual 850,000 b/d, are hoping that Turkish state firm Botas International Ltd. will be able to repair the BTC line quickly.

Botas sources said repair work began on Aug. 14, but gave no estimate of how long it would take to reopen the line. A source in the Turkish ministry of energy said repairs would take less time than earlier estimates of 2 weeks, saying the amount of damage was "not great."

The cause of the explosion and fire on the BTC's Turkish sector remains unknown, according to a Botas spokesman who said state security forces are still inspecting the site of the fire.

Amid the uncertainty over the resumption of BP's oil pipeline operations, the Russian government has been sending mixed signals, saying it is prepared to increase oil flows along the Baku-Novorosissk line, while allegedly preventing shipments of oil from Georgian ports on the Black Sea.

Russia resumed normal pumping of Azerbaijani oil along the Baku-Novorossiisk pipeline Aug.13, according to Mikhail Barkov, vice-president of state-owned pipeline monopoly, OAO Transneft.

On Aug. 12, as hostilities arose in Georgia, the State Oil Co. of Azerbaijan Republic (SOCAR) received notification from Transneft that oil shipments along Baku-Novorossiisk had been suspended due to "planned" pipeline maintenance.

Barkov said the "planned" maintenance was carried out for a period of 8 hours, and that SOCAR was informed about this in the "usual" manner. "This probably took place late Monday and the early hours of Tuesday," he said.

"The oil started flowing again a few hours ago," said Barkov, who added that Transneft had "not refused to take Azerbaijani oil or decided to block its transportation. The stoppage was due to maintenance alone," he insisted.

Barkov said the volume of Azerbaijani oil pumped along the pipeline will double to 166,000 tons in August, following a request by SOCAR, and that the pipeline could handle 240,000 tons/month of oil in September, if SOCAR files such a request.

Azerbaijan had been using the Baku-Novorossiisk pipeline to ship oil produced at the Azeri-Chirag-Gunashli fields since 1997, but Azerbaijan International Operating Co. (AIOC), the operator of the Azeri-Chirag-Gunashli fields, stopped using and operating the Baku-Novorossiisk pipeline once the BTC line was commissioned in 2006.

Transneft's announcement of increased transport through the Baku-Novorossiisk pipeline coincided with a report from Azerbaijan that Russian warships prevented a tanker with Azeri oil from leaving the Georgian port of Poti on the Black Sea.

The report, made by SOCAR head Rovnag Abdullayev over state television, was denied by Russia's General Staff, which said it is not blocking oil traffic in the region despite the military conflict with Georgia.

Russian military officials also have denied deliberately targeting or attacking any of the gas or oil pipelines crossing Georgia—a claim that appeared to be contradicted by evidence emerging from independent sources.

According to a report carried by The Wall Street Journal on Aug. 14, the physical evidence of a recent Russian air attack on the BTC line "is compelling."

The report said a line of some 45 bomb craters, each some 60 ft across, scar the landscape. It said the craters are "concentrated in an area close to where BTC and the Baku-Supsa line intersect."

"The raids suggest Russia wasn't only aiming to humiliate its neighbor militarily but also to damage its reputation as an energy corridor," the report said.

The Russian Defense Ministry earlier said it had no plans to bomb the pipeline in Georgia, though the deputy chief of Russia's armed forces general staff did voice "deep concern" over the possibility of "ecological catastrophe," (OGJ Online, Aug. 13, 2008).

Contact Eric Watkins at hippalus@yahoo.com.

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