Agreement signed for Samsun-Ceyhan oil line

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Oct. 22 -- The governments of Italy, Russia, and Turkey—aiming to reduce oil shipping away from crowded Turkish straits—agreed to build a 550-km oil pipeline from Turkey’s Black Sea port of Samsun to its Mediterranean port of Ceyhan.

“The Samsun-Ceyhan pipeline will facilitate safer transport across the Bosphorus and Dardanelles Straits as well as reducing the impact on the region’s complex and delicate ecosystem,” said Eni SPA, which bought 50% of Trans Anadolu Pipeline Co., the firm that will build and manage the line.

Eni said the agreement underlines the joint commitment of the three countries “to enhance energy security in their respective countries and in the European market through the diversification of transport routes, as well as the protection of the environment.”

The document was signed by Vice-Prime Minister of the Russian Federation Igor Ivanovich Sechin, Russian Minister of Energy Sergei Shmatko, Turkey’s Minister of Energy Taner Yildiz, and Italy’s Minister for Economic Development Claudio Scajola.

At the same time, representatives of Eni, Calik Holding, JSC Transneft, and Rosneft signed a memorandum of understanding defining the economic and contractual conditions for Russian companies to participate in the project “to ensure the volume of crude that would guarantee” its commercial sustainability.

According to Eni, the project includes construction of the main line, a terminal for receiving oil at Samsun, and an export terminal and related storage facilities at Ceyhan. The line will have an initial capacity of 1 million b/d, eventually increasing to 1.5 million b/d.

“This is an interesting prospect that will have more positives for tankers than negatives and will see Ceyhan become a major export hub,” said Steve Christy, head of research for Gibson’s shipping services.

“The pipeline will open up more potential for longhaul trade, and crude will still need to be shuttled across the Black Sea. It is an interesting prospect and makes it easier for building very large crude carrier shipments of Russian and Kazakhstan crude,” Christy told shipping newspaper Lloyd’s List.

Contact Eric Watkins at hippalus@yahoo.com.

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