Autumn 2006 (14.3)
Finally Leave Ceyhan Port for World Markets
by Tamam Bayatli, Communications
Finally, the long-awaited
day has arrived that oil from the Baku via the BTC (Baku-Tbilisi-Ceyhan)
pipeline is on its way to the world market. The pipeline linefill
was completed on May 28, 2006.
The official inauguration of the Turkish section of the Baku-Tbilisi-Ceyhan
(BTC) oil export pipeline - the new Ceyhan marine export terminal
and the full BTC pipeline export system - was held on July 13
at the Ceyhan Terminal on the Mediterranean coast of Turkey.
The event, hosted by the Turkish Government, was attended by
Presidents from Turkey (Ahmet Necdet Sezer), Azerbaijan (Ilham
Aliyev) and Georgia (Mikheil Saakashvili), together with visiting
senior government and state officials, senior executives of BTC
owner companies and business representatives.
Above: Inauguration Ceremony for the Baku-Tbilisi-Ceyhan
(BTC) Pipeline at the BTC port facilities at Ceyhan, Turkey on
July 13, 2006. Left to right: Presidents of the three countries
through which the pipeline passes: Turkey (Ahmet Necdet Sezer),
Georgia (Mikheil Saakashvili) and Azerbaijan (Ilham Aliyev).
Also Turkish Prime Minister Recep Tayyip Erdogan and Lord Browne,
Chief Executive of BP participated at the event.
To fill the 1,768 km pipeline required a total of 10 million
barrels of oil. The first tanker to take BTC oil to market was
the British Hawthorn, which sailed on June 4, 2006, from the
new Ceyhan Marine Terminal on the Mediterranean coast. This tanker
was filled with about 600,000 barrels of crude cargo.
It was the first oil from the BTC pipeline headed for world markets,
bypassing the Turkish Straits. The oil originated from the Azeri-Chirag-Gunashli
(ACG) field in the Azerbaijani sector of the Caspian Sea. In
the future, other volumes of oil, including those originating
from across the other side of the Caspian will be transported
along this pipeline route.
Left: The topsides for East Azeri was installed offshore
on July 6, 2006.
The accomplishment was
the culmination of years of work by many thousands of people
from the three countries. This is truly a world-class project
in every respect and all parties involved justifiably take pride
in what they achieved together.
Lord Browne, Chief Executive of BP, which operates BTC, addressed
the inauguration ceremony
at Ceyhan: "The commissioning of the Baku-Tbilisi-Ceyhan
pipeline is a significant step in the long history of the oil
industry. It reintegrates significant oil supplies from the Caspian
into the global market for first time in a century. On behalf
of BP, I would like to express our thanks to all those who made
it possible to get to this point.
I'd like to thank the thousands of extraordinary people from
the three countries directly involved - Azerbaijan, Georgia and
Turkey - and the people from many others beyond whose support
and involvement was indispensable - the members of the workforce,
the inhabitants of local communities, the companies, governments,
international institutions, our partners and, of course, our
own staff. BTC is the first great engineering project of the
David Woodward, BP Azerbaijan Associate President, said: "Collectively,
this is a demonstration that through the efforts of thousands
of people over the past 12 years, we have been able to make a
project a reality which many thought 'impossible'. I would like
to join Lord Browne in thanking everyone involved - the host
governments, our partners, lenders, contractors, BP staff and
the people of Azerbaijan, Georgia and Turkey for their tremendous
effort, cooperation and support."
During this early phase the pipeline oil throughput will vary
but has been more than 400,000 barrels per day. This number will
increase to one million barrels per day by 2008. While the pipeline
will continue initially to carry ACG oil, it is expected that
in the future other volumes, including oil from the other side
of the Caspian, will flow via BTC.
The BTC pipeline will enable one million barrels of oil per day
to be exported safely and responsibly from the Caspian without
increasing tanker traffic through the already crowded Turkish
Above: Workers at AzMETCO measuring plant in
Shirvanovka near Sumgayit. Last year, BP awarded AzMETCO a new
four-year contract for provision of proven calibration services
along the Northern Route, Western Route, Baku-Tbilisi-Ceyhan,
and South Caucasus pipelines.
The world-class Shah Deniz gas and condensate development project
is currently finalizing all work in preparation for the start
up of production in the next few weeks. The TPG 500 platform
offshore commissioning is complete and the pre-drilled well tieback
and completions are underway. The subsea export pipelines have
been dewatered and are ready to flow gas to the Sangachal Terminal.
The gas processing facilities at the terminal and the South Caucasus
Pipeline (SCP) gas export pipeline are currently being pre-commissioned
using SOCAR's associated gas coming from the Azeri-Chirag-Gunashli
The project commenced testing and commissioning the new SCP gas
export system by filling it with gas from the Sangachal terminal
in May. The commissioning gas was introduced into SCP from the
Sangachal terminal on May 21st and crossed the Georgian border
on May 28th.
Following the introduction of commissioning gas into the Azerbaijani
section of SCP in late May, the Georgian section was filled with
gas in September. This followed the introduction of gas into
the Sangachal Terminal processing facilities and into the Shah
Deniz subsea gas pipelines.
In the meantime BOTAS performed the "golden weld" connecting
their pipeline system to that of SCP on September 30. Following
the completion of the testing and commissioning program for BOTAS's
connection facilities, it will be possible for gas to be delivered
across the border. Initial deliveries of gas into the BOTAS pipeline
system will be used to fill and commission the BOTAS pipeline
running from the Georgian border to Erzerum in Turkey.
The conclusion of the SCP pipeline and its connection with BOTAS's
system in Turkey mark the completion of the gas artery of the
East-West energy corridor, which together with the BTC oil pipeline
is expected to make a positive difference by bringing significant
benefits to the region and the entire world.
Approximately 0.1 bcm of gas was required to commission the entire
Shah Deniz/SCP export system from the Shah Deniz Platform to
the Sangachal Terminal and on to the Georgian-Turkish border.
SCP, like BTC, is buried underground along its entire length.
Numerous design and safety features have been incorporated into
the construction of SCP to provide many layers of protection
and make it conform to the highest international standards. In
addition, to ensure the safety, security and integrity of the
pipeline, there will be regular security patrolling by both governmental
and SCP operations staff and frequent maintenance checks by SCP
East Azeri Topsides
Azeri-Chirag-Gunashli Project achieved another major milestone
in July. The topsides of the East Azeri (EA) Production, Drilling
and Quarters Platform were safely installed offshore onto the
jacket. The topsides successfully sailed away on July 26 from
the Heydar Aliyev Baku Deepwater Jacket Factory fabrication yard
where since July 6 they had been ready to sail away loaded onto
a transportation barge waiting for favorable weather conditions.
The EA platform is located at 150m water depth on the east side
of Azeri Field. The jacket of the EA platform was installed offshore
in March 2006. First Oil from EA is planned before the end of
2006 following completion of topsides offshore hook up and commissioning
activities. This will ultimately increase the Azeri-Chirag-Gunashli
offshore facilities oil production capacity by 260,000 barrels
This is, in fact, the fourth major milestone the operator has
successfully delivered since the beginning of 2006. The other
three were the start up of the West Azeri and Compression and
Water Injection platforms and the Phase 2 facilities at the Sangachal
BP is now planning to start production from East Azeri by the
end of 2006, which is a couple of months ahead of its promised
schedule. This early delivery is based on BP's standardized approach
and capability to apply successfully the lessons learned from
its previous platforms in the Caspian.
Above (Left): Jacobus Nieuwenhuijze, Director of the
Sangachal Terminal Expansion Project (STEP) presenting the Winner's
Cup at the Third Azerbaijan School Soccer (Football) Tournament.
Right: More than 800 youth
representing 82 different teams from 29 different schools in
the Garadagh district participated in the Third Azerbaijan School
Soccer Tournament organized by the Sangachal Terminal Expansion
BP, on behalf of its project partners, launched in June the first
step in an important new initiative, which will give greater
access to finance to Azerbaijan's local oil and gas industry
supplier and service enterprises.
AzMETCO - a local Joint-Stock Company of "Complex Adjustment
and Automation", became the first enterprise to receive
a loan under a new Supply Chain Finance Facility pilot project
set up by BP, on behalf of its project partners, and the International
Finance Corporation (IFC).
Since 1998, AzMETCO has been providing metrological assurance
for metering equipment at the Sangachal, Sumgayit, Siyazan, Shirvanovka
and Supsa terminals of the Northern Route and Western Route oil
export pipelines under a contact with the operator. In addition,
last December BP awarded AzMETCO a new four-year contract for
provision of proven calibration services along the Northern Route,
Western Route, Baku-Tbilisi-Ceyhan and South Caucasus pipelines.
The Supply Chain Finance Facility (SFF) is a joint credit facility
aimed at supporting development of Azerbaijan's local oil and
gas industry supplier and service enterprises through resources
provided by BP and its partners, the IFC and a local financial
institution selected by the IFC.
Left: By May 28, 2006, the BTC Pipeline linefill had
been completed. Oil had flowed from Baku for nearly 1,100 miles
to the Mediterranean port of Turkey. By July 13 when the Inauguration
Ceremony took place already 25 tankers, like this one, had loaded
up with Azerbaijan's oil and headed off to world markets.
The project is in line with BP's and its partners' target to
double their total spending with locally-owned companies by 2010
increasing it to more than $500 million a year. The SFF is designed
to be implemented in several phases. The first phase of the credit
component of the project has already been launched as a pilot
program and will be managed by the IFC.
This pilot project is implemented through a separate IFC grant
agreement with the Micro-Finance Bank of Azerbaijan (MFBA) and
a total loan capital of $316,000. This will provide loans for
up to three selected local suppliers of BP and its partners in
Azerbaijan. Under this agreement, BP on behalf of its partners
will provide $140,000; the IFC $140,000 (of which $20,000 is
for technical development and appraisal of this pilot phase)
and the remaining $56,000 will be invested by MFBA.
Local companies eligible to receive SFF loans will be selected
for competitive pre-qualification exercises by BP and its partners'
Enterprise Centre, then will pass through the MFBA credit appraisal
and will finally be approved by the SFF Credit Committee comprising
representatives of all the three parties involved.
Phase 2 of the SFF will be much larger in scale and once approved,
it will allow us to begin extending further loans to more local
companies, who meet the established criteria, by the end of 2006.
In August, BP awarded a major contract to a local Azerbaijani
service company on behalf of its partners. RT Services Ltd was
selected from among 26 participants (18 of them local companies
and joint ventures with local business partners) in four-month
pre-qualification and tendering exercises conducted by BP for
a hazardous liquid waste treatment services contract.
This is BP's first direct contract with RT Services, whose previous
experience of joint work with us has been through subcontracting
arrangements. The contract duration is one year with a total
value of up to $900,000. This new contract is in line with BP's
and its partners' efforts to maximize local content in their
projects through increasing both the number of companies participating
in their contracts, and the value of contracts awarded locally.
RT Services Ltd. was founded in 2002 to provide waste management
services to both local and foreign companies based in the Caspian
region including Azerbaijan. The company is fully licensed by
the Ministry of Ecology and Natural Resources to provide industrial
wastes (including toxic wastes) utilization services.
"We are very pleased to have this opportunity to work with
another specialized local service provider. RT Services Ltd is
an experienced company holding all necessary licenses to meet
our requirements for providing waste management services to the
acceptable standards," says Namig Abbasov, BP's Regional
Environmental Compliance Manager.
BP recently presented its 2005 Sustainability Report for Azerbaijan.
The report covers the company's business performance, environmental
track record and its wider role in the country. The report has
been issued in Azerbaijan since 2003 as an initiative aimed at
reporting openly on the company's activities and how it manages
its business, assisting a constructive dialogue with interested
parties and demonstrating its approach to corporate responsibility
This third report has more extended people and environmental
management sections, as well as the BP and Climate Change section,
which has recently been added. Another distinction is that unlike
the previous two reports, this one was fully designed and printed
in Azerbaijan in two languages - Azerbaijani and English. The
report is fully posted in both languages on BP Azerbaijan's website:
Third Soccer Tournament
The Sangachal Terminal Expansion Project (STEP) held in June
the Third Azerbaijan School Soccer Tournament, which is believed
to be the biggest of its kind in the Caspian region. The event
brought together 82 teams. The number of participants was about
820 children aged between 12 and 16 from all the 29 schools located
in the Garadagh district. In addition, there were 82 school teachers
involved as coaches and a large number of other people supporting
the event as referees, doctors, nurses, catering services, coordinators
who brought the total number of people involved to more than
Along with the partners of the projects operated by BP, 30 other
sponsoring organizations and individuals supported the 82 teams.
The initiative, which the terminal launched two years ago to
bring the children of the entire Garadagh district together,
has now turned into the biggest annual sporting event in the
Caspian region. The number of participating teams and schools
and sponsoring organizations and individuals is expanding year
AI 14.3 (Autumn
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