EurasiaNet Eurasia Insight - Pipeline Groundbreaking Ceremony Takes Place in Baku

EURASIA INSIGHT

PIPELINE GROUNDBREAKING CEREMONY TAKES PLACE IN BAKU
9/18/02

As the presidents of Azerbaijan, Georgia and Turkey stood by, workers in the Azerbaijani capital of Baku broke ground September 18 for an oil pipeline. The pipeline, slated to run through Georgia and empty into the Turkish port of Ceyhan, lies at the foundation of these countries’ economic hopes.

"Baku-Tbilisi-Ceyhan will go forward," Azerbaijani President Heidar Aliyev said during the groundbreaking ceremony broadcast live on television in Azerbaijan. He added that the pipeline will "make the South Caucasus region much safer."

US Energy Secretary Spencer Abraham, who also attended the ceremony, echoed Aliyev’s comments on the pipeline’s potential as a force for stabilization in a region Abraham indicated that the pipeline would help protect the sovereignty of states in the Caucasus, including Azerbaijan and Georgia, by providing a reliable and substantial source of revenue that is largely independent of Russian influence.

The Baku-Tbilisi-Ceyhan pipeline, often termed BTC, will run for over 1,700 kilometers (over 1,000 miles). Cost estimates range between $2.4 billion and $2.9 billion. The pipeline is projected to have a capacity of about 50 million metric tons of oil per year.

The United States has been a major supporter of the project, even though some observers continue to question whether there is enough demand to justify the cost of building the pipeline in such a volatile region, over rugged, mountainous terrain. [For background information see the Eurasia Business & Economics archive]. Some engineers continue to consider construction to be a daunting task, according to some media reports.

Whatever its economic payoff, the pipeline marks a deepening American influence in the region. Once complete, the pipeline will run to the Mediterranean Sea, while circumventing Russia. Moscow does not object to BTC as loudly as it once did, but Russian officials continue to oppose it.

Russian Foreign Minister Igor Ivanov told business executives in New York on September 17 that the pipeline route "does not have enough oil to justify investment," citing the opinion of "independent experts." Aliyev, speaking at the groundbreaking ceremony, dismissed this opinion. The foundation, media reports quoted him saying, represents a move "from dreams to reality."

The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues.

The views expressed in this publication do not necessarily represent the position of the Open Society Institute and are the sole responsibility of the author or authors.