BAKU, Azerbaijan, Sept. 18 (UPI) -- The presidents of Georgia, Turkey and Azerbaijan helped break ground Wednesday to start construction of the Baku-Tbilisi-Ceyhan pipeline, a U.S.-backed project that will transport oil from the Caspian Sea to Turkey and Western markets.
The Caspian area is considered to be the world's fastest-growing oil region, and construction of the 1,100-mile, $2.9 billion pipeline that will bypass Russia, is a sign of the growing U.S. presence in the region.
The construction will be led by British Petroleum, and will include U.S. Unocal, French TotalFinaElf, Norway's Statoil, Saudi Arabia's Delta Hess, Turkey's TPAO, Japan's Itochu, Italy's ENI and Azeri SOCAR.
Completion of the pipeline is scheduled for early 2005, when the pipe is expected to carry some 450,000 barrels of oil a day from Azeri-Chirag-Guneshli field. BTC is also expected to carry more oil from Kazakh fields, and there are plans to build a gas pipeline alongside BTC which will take gas from Turkmenistan to Erzurum in Turkey.
"This is an immense victory and a very important development for the region. Most importantly it opens alternatives for Kazakhstan and Turkmenistan and will allow them to avoid Russian routes. Kazakhstan already committed to using the pipeline for transportation of its oil, and it will bring possibilities for transportation of Turkmen gas as well," said Sandro Tvalmkrelidze, a Tbilisi-based independent economic expert.
The United States has supported the BTC pipeline over alternative routes that would take the Caspian oil through neighboring Russia or Iran. Oil companies were skeptical about the route and argued that there was not enough oil to justify the construction.
The BTC project is nearly as noteworthy politically and economically, with interests in Russia, the United States and Iran involved in addition to Turkey and regional governments of Georgia and Azerbaijan and the reluctance of oil companies to invest into turbulent region and questionable oil resources.
Those known resources were boosted two years ago with the discovery of additional reserves in the Caspian basin.
Russia and Iran have strongly opposed construction of the pipeline. However, as the events of Sept. 11, 2001, changed U.S.-Russian relations, Moscow softened its position.
