An almost 1,100-mile-long oil pipeline just opened between the rich Caspian oil fields of Azerbaijan at Baku, running through Georgia’s capital Tblisi, to the Mediterranean. Turkish port of Ceyhan. A city of 100,000, one-third Kurdish and 50 miles above the Syrian border, Ceyhan is already the terminus for a pipeline originating in Kirkuk in Iraq.
By comparison, the Trans-Alaska pipeline is 800 miles long and lies within the United States. It carries a maximum of 1 million barrels a day at full capacity.
The new $3.9 billion dollar British Petroleum-led Baku-Tblisi-Ceyhan pipeline will initially carry 600,000 barrels a day and at full capacity can move 2 million.
As it transits Azerbaijan, Georgia and Turkey, the presidents of Turkey, Azerbaijan and Georgia as well as the CEO of BP, Sir John Browne, were all present for the opening ceremonies at Ceyhan.
The continuing unrest in the Persian Gulf makes the use of NATO ally Turkey as an energy transit point appear an increasingly attractive option for energy import-dependent Europe.
The 2 to 3 million barrels a day that pass the strategic choke point in the Straits of Hormuz have been watched nervously by Gulf-centric oil importers for the 25 years since the Iranian revolution.
Current soaring oil prices indicate the wearing effect of continuing instability in the area.
The capacity of the new Baku-Tblisi-Ceyhan pipeline alone clearly decreases the vulnerability of the international supply of crude.
And the traffic jam of oil transport vessels trying to transit the tricky Turkish straits through the Bosphorus, Sea of Marmora, and the Dardenelles, from the Black Sea to the Mediterranean, has ships waiting for weeks at times.
These sea-borne oil exports, largely from Kazakstan and Russia, can already reach 2 million barrels a day as well.
Turkey already serves as a terminal for Iraqi and Iranian oil and gas pipelines, and another BP-led pipeline from natural gas from Azerbaijan is scheduled for connection into the existing Turkish natural gas pipelines at Ezerum in September.
The discovery of huge gas deposits in the Shakh Deniz field in Azerbaijan’s Caspian Sea in the late 1990s revolutionized thinking about the options for the distribution of regional natural gas as well.
While Turkey had originally planned major natural gas imports from the under-utilized Turkmenistan fields via a pipeline that would transit Azerbaijan, it now appears Azerbaijan holds the more leveraged position.
The Baku-Tblisi-Ceyhan pipeline revenues alone are expected to triple the Azerbaijan GDP.
The conflict earlier this year between Ukraine and Russia over the Russian natural gas pipeline that serves much of Europe was a reminder that the vulnerability of European energy access wasn’t restricted to the Persian Gulf.
Accordingly, plans are already underway to also route the new Caspian gas resources across Turkish Anatolia and the Bosphorus terminating in Austria, with another gas pipeline crossing Turkey and planned to run under the Mediterranean Sea to its uneasy NATO ally Greece and potentially on to Italy.
With so many regulatory and environmental difficulties attending the construction of new refineries in the developed world, it is not surprising that Reuters has reported Austria’s large OMV interest in Turkey’s Petrol Ofsi oil company is seriously considering placing a refinery at Ceyhan.
Experts agree that oil imports will continue to increase in the developed world, and multinational energy transits are potentially subject to disagreements and political fluctuations between the partners, wherever they may be.
The new pipeline runs a circuitous and more expensive route around a heavily Kurdish-populated area of Turkey, but it may still be as vulnerable to sabotage by Kurdish PKK separatists as Iraqi pipelines are to dissident terrorists. But there can be little doubt that, for now, the opening of new Baku-Tblisi-Ceyhan pipeline and the continuing expansion of the more stable Turkish corridor for energy distribution represents a rare bright spot in the world’s troubled oil markets.
Current EU and US sources forecast that by 2010 almost 10% of the world’s oil exports may transit Turkey making its strategic position as a bridge across two continents a great deal more important than a geographical accident.
Thomas H. Lipscomb is a senior fellow at the Annenberg Center for the Digital Future in New York.
