Financial Times publishes article on Baku-Tbilisi-Ceyhan

Baku. 28 April. REPORT.AZ/ Financial Times newspaper has published article on the Baku-Tbilisi-Ceyhan (BTC) pipeline and called it 'the new Silk Road'.

Report informs, after the break-up of the Soviet Union in 1991, the newly independent countries started looking for new routes for energy exports and supplies. One possible project was an oil pipeline stretching for 1,770 kilometres from the Azerbaijani capital Baku through the capital of Georgia, Tbilisi, all the way to theTurkish port of Ceyhan. The BTC pipeline was to have capacity to pump one million barrels of oil per day – slightly over 1 per cent of today’s total crude oil production worldwide: 'The vision became reality, and the European Bank for Reconstruction and Development (EBRD) played a crucial role in making a dream come true'.

The article also dealt with the loan, allocated by the EBRD for the project financing: 'For Azerbaijani – and Caspian – oil, it was the first alternative route to the West. The cost was initially estimated at US$ 3.6 billion before settling slightly higher after some amendments to the route. In 2003 the EBRD approved a 12-year loan for BTC of up to US$ 125 million for its own account and syndicated a 10-year US$ 125 million loan to commercial lenders'. In addition to the EBRD, the International Finance Corporation (IFC), US-Exim, JBIC, Nexi, Hermes, SACE, Coface, ECGD, OPIC and a number of commercial banks such as Société Générale, ABN Amro, Citibank and Mizuho, also provided finance to the BTC project.

It was noted that in parallel with BTC, the Southern Caucasus Pipeline (SCP), was built alongside to transport gas from the Sangachal terminal near Baku via Georgia to Turkey. Today, SCP is being extended to allow for additional gas from the Shah Deniz field in the Caspian Sea off Baku to flow towards Turkey and Europe'.

Chief of the EBRD for Energy and Natural Resources Riccardo Puliti says: 'BTC was the first of a series of projects to link the energy resources of the Caspian to international markets, especially in Europe. Now the Southern Gas Corridor project pursues the same objectives and should be able to deliver Caspian gas to Europe'. BTC negotiation process, environmental impact of the pipeline and the works done in social areas mentioned in the article.

It was noted that in light of the recent declines in energy prices, private investors might be having second thoughts about the energy sector. But the EBRD is taking a long-term view. It stands ready to support cross-border energy projects that help provide energy security for economies.