Supsa Terminal and Pipeline, Georgia / Azerbaijan

The Baku-Supsa pipeline is one of many such projects which have sprung up in the region since the fall of Communism. The massive natural resources of the Caspian region were opened to foreign investment for the first time. The route of this pipeline runs from the Sangachal terminal 40 km south of Baku, capital of Azerbaijan, to the Georgian port of Supsa on the Black Sea.

SUPSA PROJECT TIMESCALE

The terminal was completed and officially opened in April 1999. The pipeline itself had been finished in the last quarter of 1998, with oil deliveries beginning in the first quarter of 1999. It had been started some four and a half years previously. However, the lead contract was only awarded to Kvaerner in 1996 and was completed on time and to budget within 3 years. The total cost of the western route has been estimated at $556 million.

TERMINAL AND PIPELINE DETAILS

The pipeline is 930 kilometres (516 miles) long. It is essentially a refurbished Soviet era pipeline. Transport capacity in the pipeline is 115,000 barrels/day, with opportunities to expand this up to 220,000 barrels/day.

There are 6 pump stations, 2 pressure reduction stations in west Georgia, the Supsa terminal and the offshore loading facility. The storage tanks at the terminal have a total capacity of 160,000 cubic metres. There are four altogether, of equal size. The facilities can load at a rate of 6,000 cubic metres an hour.

LEAD CONTRACTOR(S)

The lead contractor for the terminal is Kvaerner John Brown, although there are many smaller companies involved. For example, the catenary anchor leg mooring (CALM) system was installed by Dutch firm, Bluewater. Another small company called Corinth Pipeworks SA, of Greece, supplied steel pipes for the project. An unusual feature of the terminal is that it will have a marine security system supplied by Lockheed Martin, the American defence company.

The construction of the main civil works and buildings of the Supsa oil terminal including the control and administration building, maintenance workshop, substation, security gate house and fire station were completed by TML Construction, Turkey. This included steel structures (including shelters for export pumps, fire water pumps, diesel transfer pumps, runway beams, access platforms, support frames for cabling), foundations (including piling for pumps, generators, tankage, steel structures, pipe tracks and pipe supports), roads, bund walls, site levelling and drainage works. The value of this contract was $9.3 million.

The project has benefited from European support. Notably the EIB decided to commit $120 million to the terminal in February 2000. This is likely to be used to upgrade the facility from its 115,000 barrels/day capacity.

FUTURE PLANS

The Georgian authorities have discussed the possibility of building a refinery at Supsa to process the crude oil coming out of the pipeline. The Georgian government is keen to cement the pipeline as a permanent feature since it yields a steady and reliable stream of tax revenues.

The proposed western route, a re-furbished Soviet-era line, bypasses Russia but is opposed by Turkey as it requires tankers for crossing the Black Sea, which are forced to transit the Bosporus. Turkey sees this as a potential ecological hazard. This is a significant threat since Turkey is in control of the only route from Georgia to the west. The long term future of the pipeline is also in doubt since Georgia is currently suffering a civil war. It is likely that if the civil unrest in Chechnya and Dagestan could be settled, a route through southern Russia would be preferred.

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