“We have agreed with the bank for the financing of the Baku-Ceyhan project and the Bank is ready to fund $300 million before the end of 2002,” a senior official from the Turkish energy ministry told our correspondent.
A BP-led consortium plans to start building the $2.9-billion, 1,730-km oil pipeline in July, with completion by 2005. The link will carry up to 1Mbrl/d of crude oil, mainly from Azerbaijan’s giant offshore fields operated by BP, to Turkey’s southern coast.
Between 20-30% of the cost will be financed by the BP consortium in cash, with the rest being borrowed from international financial institutions. The US-backed pipeline project was masterminded by Turkey in the early 1990s to by-pass its already-busy Bosporus Straits, the only outlet at present for Russian and Caspian oil transported via the Black Sea.
The BP-led group earlier this year decided to build the Baku-Ceyhan pipeline along the same route as the Blue Stream gas pipeline to Turkey from the huge Azerbaijan offshore gasfield, also operated by BP.
The Turkish ministry official said Western banks were ready to provide both pipeline projects with up to $2 billion, but declined to name other potential lenders. He also said the US Eximbank, Japan’s Eximbank, and the International Finance Corporation (IFC) were among those interested in providing financing for the project. The EBRD has lent $350 million to the Azeri economy and has invested another $265 million in Caspian Sea oil projects.
