Eric Watkins
Senior Correspondent
LOS ANGELES, Apr. 21 -- Baku-Tblisi-Ceyhan Pipeline Co. is holding talks with a number of oil producers in Kazakhstan aimed at securing crude for transmission through the line.
While oil blends with high sulfur content will not be moved through the 1,768-km line, a special rate would apply to other blends varying quality from Azeri Light, according to David Woodward, chief executive of BP-Azerbaijan, which holds 30.1% of the project.
"As for the blends acknowledged as capable for the transportation, a special scheme will be applied according to which if some blend is lower in quality than Azeri Light, for instance, by 5%, then at the exit of oil in Ceyhan the shipper will get 5% less oil," he said.
Woodward also acknowledged that spending on the project would increase to $3.9 billion from the planned $2.95 billion, largely due to higher spending on filling the pipeline with oil, delays, and commercial issues with contractors.
In early April, officials in Azerbaijan acknowledged that the State Oil Fund's expenditure on the Azerbaijani share of the project would exceed the sum agreed for this year—$41.7 million.
"We supposed that the pipeline construction would be completed quicker," said Samir Sarifov, executive director of the fund. "However, there are delays in the pipeline's Turkish section, which is being laid by Botas Co. Therefore, there is some growth in spending on the project."
According to Turkish officials, the first tanker of crude oil from the line will be loaded on May 27 at the export terminal at Turkey's Mediterranean port of Ceyhan.
Contact Eric Watkins at [email protected].