Baku-Tbilisi-Ceyhan (BTC) Caspian Pipeline

BP's Baku-Tbilisi-Ceyhan (BTC) pipeline will take oil from the Caspian Sea to the Mediterranean instead of using tanker transport along the Black Sea and the highly congested Bosporus. It will obviate 350 tanker cargos per year through this narrow waterway.

The BTC pipeline project cost an estimated $3.7 billion, with BP as operator. The pipeline was officially inaugurated at the Sangachal terminal, near Baku, by President Ilham Aliyev of the Azerbaijan Republic, President Mikhail Saakashvilli of Georgia and President Ahmet Sezer of Turkey, joined by President Nursaltan Nazarbayev of Kazakhstan on 25 May 2005.

Filling the pipeline with crude oil between Azerbaijan and Turkey's Mediterranean coast began on 25 May 2005. BP holds a 30% stake in the consortium running the pipeline. Other consortium members include Azerbaijan's state oil company SOCAR (25%), Amerada Hess (2.36%), ConocoPhillips (2.5%), Eni (5%), Inpex (2.5%), Itochu (3.4%), Statoil (8.71%), Total-FINA-ELF (5%), TPAO (6.53%) and Unocal (8.9%). The pipeline was constructed by, and will be managed by, the consortium company Baku-Tbilisi-Ceyhan Pipeline Company (BTC Co).

The first oil is anticipated to flow at the end of 2005 following a series of tests and the gradual filling process. Crude oil will take six months to traverse the full length of the pipeline when it is fully operational.

The pipeline has been designed to accommodate an oil throughput of one million barrels per day (50 million t/yr). It has also been designed with an initial working life of approximately 40 years. The pipeline is protected against corrosion for its entire length and since security is such a big issue it will be subject to constant safety surveillance, patrols and closed circuit TV observation (in case of terrorist incursion).

The construction project employed over 10,000 personnel and the long-term maintenance of the pipeline will require 1,000 personnel. The cost of transporting oil down the pipeline has been estimated at $3.2 per barrel which, given the current market (2005) where the cost of a barrel of crude is hovering around $50, is very reasonable. Once the pipeline becomes fully operational, Azerbaijan will be the main beneficiary of the sale of its oil in international markets, collecting (at current prices) about $29 billion per year in oil revenues, while Georgia and Turkey will collect transit fees of $600 million and $1.5 billion respectively per year.

BTC PIPELINE ROUTE AND SPECIFICATION

The pipeline route passes over 1,768km (1,100 miles) through the countries of Azerbaijan (445km), Georgia (245km) and Turkey (1,070km). In doing so it reaches an altitude of 2,800m as it passes across the Caucasus Mountains and East Anatolia.

The pipeline crosses the land of 20,000 individuals and companies who have been compensated with a share of over $133 million for the acquisition of rights to the small portion of their land where the pipeline runs. Although the pipeline is underground and the land reinstated on top, all that remains visible are eight pumping stations (two each in Azerbaijan and Georgia and four in Turkey).

The pipeline consists of approx. 150,000 joints of line pipe, each measuring 12m in length. This corresponds to a weight of approximately 655,000t.

The start of the pipeline is at the Sangachal terminal near Baku, which receives all the oil from the Azeri, Chirag and Gunashli (ACG) offshore oilfields in the Caspian (the control system of the pipeline is also situated here). The terminus of the pipeline is at a new marine terminal at Ceyhan in Turkey, where crude oil transportation tankers will be loaded. It has been estimated that the ACG oil fields have reserves in excess of 5.4 billion barrels. The ACG fields are being developed by the Azerbaijan International Operating Company (AIOC), a subsidiary of BP.

The Sangchal Terminal in Baku has two crude storage tanks, a central control station, metering facilities and a pumping station. The Ceyhan Marine terminal has seven crude oil storage tanks, a metering station, wastewater treatment, a vapour incineration facility and a jetty capable of loading two 300,000dwt tankers simultaneously.

The temperature at the receiving terminal will be 30°C, allowing the oil to flow freely, although it will gradually lose heat. In the mountains, especially in the winter, ambient temperatures of -40°C and ground temperatures of -5°C are likely to result in an increase in viscosity. The oil has a high wax content of 8% to 14% by volume. To clear wax deposition, mechanical pigs will be sent along the line periodically. The speed of the oil through the pipeline is estimated at an average of 2m/s.

SECURITY

Because it traverses 176 widely varied and sensitive terrains while crossing the politically unstable Caucasus region, the BTC was bedevilled by worries about its security and environmental risks. Accordingly, the US military's Special Forces trained 1,500 to 2,000 Georgian soldiers in anti-terrorism techniques under a $64 million program aimed at protecting the pipeline against saboteurs. In addition, a BP-led consortium granted an additional $25 million to local non-governmental organizations to manage environmental programs.

CONTRACTORS

BOTAS Petroleum Pipeline Corporation of Ankara in Turkey was the turnkey contractor for the project. Contractor screening and pre-qualification was carried out with Kvaerner, an independent engineering company (now known as John Brown Hydrocarbons).

Pipelay and facilities contracts in Azerbaijan and Georgia were awarded in August 2002. The Greek-based Consolidated Contractors International (CCIC) were awarded a contract for pipelay in Azerbaijan and the construction of the pumping stations ($229 million), and the Franco-British Spie Capag / US Petrofac for pipelay in Georgia and also the construction of pumping stations ($248 million). Additional contracts worth about $1.25 billion were later awarded in Turkey by BOTAS.

PIPELINE PUMPING AND METERING STATIONS

At the first stage of the pipeline crossing Azerbaijan, the line has a diameter of 1,070mm. As it rises from the plains up into the Caucasus mountains and into Georgia this increases to 1,170mm, reverts back to 1,070mm on the route across Turkish Anatolia and, as it nears Ceyhan, reduces to 865mm.

There are eight pumping stations along the route, which are used to boost the oil pressure. There are also 101 block valve stations which will enable the pipeline to be isolated into sections. The pump and block valve stations will also provide power for the cathodic protection system which will be used to prevent corrosion along the line. The sections are also coated with a three-layer system of fusion bonded epoxy (FBE), adhesive and polythene.

There are four metering stations, one each in Azerbaijan and Georgia and two in Turkey. The line is buried at least 1m deep, although in some locations this is as much as 10m.

BTC PIPELINE INSTALLATION

BP will work along a 32m-wide corridor while installing BTC pipeline - growing to 44m where the South Caucasus Pipeline (SCP), which will carry gas from the Caspian Sea to the Turkish border, runs parallel to it. The BTC pipeline crosses over 3,000 roads, railways and utility lines, both over ground and underground. It also traverses 1,500 watercourses. The widest river crossing is the Cayhan River in Turkey, which is 5.2m deep and over 500m wide.

SEISMIC PROTECTION

Much of the area is seismically active: the route passes through three active faults in Azerbaijan, four in Georgia and seven in Turkey. This potential problem required a number of technical solutions such as reducing the angle at which the line crosses the fault or building in flexibility - installing a line layout that reduces soil resistance along the pipeline, allowing the substrate to move more freely, independent of the pipe in the event of earth movement.

The trenches can also be filled with rounded granular material which helps movements take place easily, relative to the pipe. There is a computerised leak detection system which will work by analysing pressure drops and detecting the acoustic waves transmitted in the event of the leak.

FUTURE RELATED PROJECTS

In March 2005, Kazakhstan and Azerbaijan agreed to build the Aktau-Baku pipeline, connecting the Kashagan offshore oil fields near Aktau in Kazakhstan to the BTC in Baku via a sub-Caspian in 2008. The Kashagan field is expected to produce 1.2 million bbl/d by 2016, when 600,000bbl/d of its production is to be shipped across the Caspian Sea to be fed into the BTC line.

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