OilVoice - BP Reopens BTC Pipeline Through Georgia

BP Reopens BTC Pipeline Through Georgia

Tuesday, August 26, 2008

Crude oil was once again flowing through the Baku-Tbilisi-Ceyhan (BTC) pipeline, by the barrel load, as of Monday morning - for the first time since its closure more than two weeks ago.

The eagerly awaited reopening of the BTC pipeline, which moves oil through Georgia from Azerbaijan and onto Turkey’s Mediterranean Coast, will feed tankers on Tuesday for the first time since fire affected the main outlet for Azeri crude to US and European markets.

Murat Lecompte, a spokesman for BP based in Istanbul, said: “The first tanker will dock after midnight tonight (Monday).”

A consortium of energy companies led by BP, who has a 30.1% stake, owns the BTC line. The State Oil Company of Azerbaijan owns 25%. And, Chevron, Total and ConocoPhillips all hold smaller stakes.

The pipeline, which provides around 1 million barrels per day (bpd) of Caspian Sea crude to international markets, has been closed for more than two weeks after a fire caused by an explosion near the line, on its Turkish stretch. It has yet to be confirmed whether claims by Kurdish rebels of responsibility for the blaze hold any merit.

The pipeline is pumping at about 70% capacity, said Huseyin Sagir, a spokesman for Botas International - BP's Turkish partner. Crude was pumped over the weekend to replenish storage depots at Ceyhan and has now reached sufficient levels, he added. The depots have a capacity of 7 million barrels, and would take at least a week to fill if the line were running at full capacity.

Meanwhile, gas extraction from the gas condensate deposit of Sah Daniz has also been brought to normal, BP - the operator of both projects, said.

In New York, on Monday, the price of crude saw little change – following a more than $US6.00 a barrel drop on August 22, the most in percentage terms for more than three years.

'”The pipeline restart was a contributing factor, putting more supply in the market,'” said Jonathan Barratt, Managing Director of Commodity Broking Services, in Sydney, in reference to the price stability in the day’s trading.

He continued: “Oil is trading in a very volatile, wide range. The volatility is telling me that a base is trying to form,” and that prices won't sink much further.

Crude oil for October delivery closed at $US114.45 a barrel, down 14 cents, in after-hours electronic trading on the New York Mercantile Exchange in morning trade in Singapore.