ECONOMY


PIPELINE GETS FUNDING

A syndicate of international commercial banks is to provide 1.2bn dollars for the Baku-Tbilisi-Ceyhan oil pipeline project, the press service of BP Azerbaijan has told AzerTaj.

The press service said that 15 banks set up a syndicate to finance the Baku-Tbilisi-Ceyhan project. The syndicate was organized by ABN Amro, Citygroup, Mizuho and Societe Generale. The total amount of funds attracted for the project, including interest rates, will amount to 2.5bn dollars , with a total project cost of 3.6bn dollars.

Direct construction costs will amount to 2.95bn dollars, of which 30 per cent will be invested by shareholders and 70 per cent will be received as credits. Other expenditures include the acquisition of 10m barrels of oil to fill the pipeline (about 250m dollars - Interfax), and servicing of credits.

The future pipeline will stretch 1,767 kilometres (443 km through Azerbaijan, 248 km through Georgia and 1,076 km through Turkey) and will have a capacity of 50m tonnes of oil per annum and will require 1.5m tonnes of oil to fill it. The cost of the project is estimated at 2.95bn dollars. It is planned to complete construction work in the fourth quarter 2004 and to start to export Azerbaijani oil from the port of Ceyhan in May 2005.

The participants in the BTC project are: BP (30.1 per cent), SOCAR (25 per cent), UNOCAL (8.9 per cent), Statoil (8.71 per cent), TPAO (6.53 per cent), ENI (5 per cent), Itochu (3.4 per cent), ConocoPhillips (2.5 per cent), INPEX (2.5 per cent), TotalFinaElf (5 per cent), and Amerada Hess (2.36 per cent).

Creditors for the project break down into four groups. Firstly we have international financial organizations (the European Bank for Reconstruction and Development and the International Finance Corporation), which will provide their own funds in addition to guarantee for credits from commercial banks. The second group includes export-credit agencies that will provide guarantees to commercial banks to finance supplies of materials and equipment from six economically developed countries - the US, Britain, Japan, Germany, Italy and France. The third group includes 10 to 30 commercial banks and the fourth group includes participants in the project - BP, Statoil, Total and ConocoPhillips, which may pay out a total of 800m dollars.

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