New Oil Pipeline 'Advances Cause of Freedom, Bush Says

July 7, 2008 - 7:16 PM

(CNSNews.com) - In a major achievement for the Caucasus and a strategic victory for the U.S., one of the world's longest oil pipelines has come on line, providing the region with its first outlet to world oil markets that bypasses Russia.

The Baku-Tbilisi-Ceyhan (BTC) pipeline "can help generate balanced economic growth, and provide a foundation for a prosperous and just society that advances the cause of freedom," President Bush said in a message, read by Energy Secretary Samuel Bodman at the inauguration ceremony Wednesday.

Just short of 1,100 miles long, the buried pipeline will by the year's end funnel one million barrels of oil a day, traveling at two meters per second, from Azerbaijan on the landlocked Caspian Sea, via Georgia, to the Turkish Mediterranean port of Ceyhan.

The project is strongly supported by the U.S., while Russia has opposed it, favoring an existing route for Caspian Basin oil via the Russian Black Sea port of Novorosiisk -- a route that provides Russia with transit revenues and bypasses both Georgia and Turkey.

Although the Bush administration has been cautious not to antagonize Moscow -- which has seen its influence sharply wane on its southwestern flank -- the State Department hailed the pipeline opening as "a major success for the U.S. goal of enhancing and diversifying global energy supplies."

Not only will the BTC break Russia's virtual monopoly on regional energy export routes, it will also boost supplies from non-OPEC and non-Middle Eastern sources. Oil will come both from Azerbaijan's offshore fields and from Kazakhstan, the giant republic east of the Caspian Sea.

The ceremony near Baku, the Azerbaijan capital, was attended by the presidents of Turkey, Georgia, Azerbaijan and Kazakhstan, and guests including the head of British energy giant BP, which holds the largest stake (30 percent) in a consortium running the pipeline. Other major shareholders include Azerbaijani state oil company SOCAR (25 percent and U.S. Unocal (almost nine percent).

An expected Russian attendee, President Vladimir Putin's representative for international energy cooperation, failed to turn up. The Interfax news agency said the Kremlin cited illness.

Listing the benefits Washington sees in the project, the State Department said it would reinforce the sovereignty and prosperity of Azerbaijan and Georgia and further integrate the two into the international free market economy.

"The BTC pipeline will also enhance Turkey's emerging role as an energy transportation hub and help reduce oil tanker traffic congestion in the Bosphorus and Dardanelles straits," it added, referring to the narrow waterways tankers now have to navigate to exit the Black Sea en route to the Mediterranean and world markets.

Bolstering the participating states' independence from Russia, the launch of the pipeline marks a further shift in geo-political alliances in a region that formed part of the Soviet empire before its disintegration in 1991.

In 2003, Georgia's "Rose Revolution" replaced a pro-Moscow administration with a pro-Western one under President Mikhail Saakashvili.

Bush's recent visit to Tbilisi cemented strong relations between Georgia and the U.S., which is also backing Saakashvili's call for Russia to remove two remaining Cold War-era military bases from the small country.

Azerbaijan and Kazakhstan still are ruled by autocratic regimes relatively friendly to Moscow, under presidents Ilham Aliyev and Nursultan Nazarbayev, respectively. Nonetheless, Nazarbayev's last-minute announcement that the BTC will be used as one export outlet for oil-rich Kazakhstan is likely to upset Russia further.

Construction on the $3.6 billion project began in 2003, almost a decade after the idea was broached.

Among concerns raised over the years was the security issue -- related to Chechen terrorists hiding out in Georgia and to the long-running Azerbaijan-Armenian dispute over an enclave called Nagorno-Karabakh -- and environmentalists' worries about the impact of a potential accidental or terror-related oil spillage.

On Monday, Georgia's government said the three BTC countries were concluding a mutual-assistance agreement in case of security or other threat to the pipeline.

According to BP's head office in the UK, just filling the length of the pipeline will require ten million barrels of crude oil, and it will take about six months for the flow to reach the Turkish end for the first tanker loading.

A gas pipeline is also under construction, following the same route.

Send a Letter to the Editor about this article.