Concerns for vital Caspian oil pipeline

THE conflict erupting in the Caucasus has set alarm bells ringing for many reasons, not least Georgia’s pivotal role in thesupply of Central Asian oil to the West.

While it has no significant oil or gas reserves of its own, Georgia is a key transit point for oil from the Caspian region destined for Europe and the US.

Crucially, it is the only practical route from this increasingly important producer region that avoids both Russia and Iran.

The 1770km Baku-Tbilisi-Ceyhan pipeline, which cost $US3 billion ($3.4 billion) to build and was partly underwritten by British taxpayers, entered full service last year.

It is the world’s second-longest oil pipeline and pumps about a million barrels a day from Baku, on the coast of the Caspian Sea inAzerbaijan, to Yumurtalik, on Turkey’s Mediterranean coast, where it is loaded on to supertankers.

The route avoids the congested Bosphorus shipping lane.

About 250km of the route passes through Georgia, with parts of it running only 55km from South Ossetia.

It also runs close to another secessionist Georgian region, Abkhazia.

The security of the BTC pipeline has been a concern since before it was built.

The first big attack on the pipeline took place last week in Turkey, where part of it was destroyed by Kurdish separatists.

Output from the pipeline, which carries more than 1 per cent of the global supply, hasbeen cut and is likely to be on hold for several weeks while afire is extinguished and the damage repaired.

The threat of another attack byseparatists in Georgia is very real.

Georgian rebels in the breakaway regions have threatened to sabotage the pipeline in the past.

The BTC pipeline, which is 30per cent owned by BP, is buried throughout its length to make attacks more difficult.

It was first conceived in the 1990s as a way of cutting the West’s dependence on energy supplies from the Middle East and Russia, and was always a politically charged project.

Russia, which views the Caucasus as its own sphere of influence, wants Central Asian oil to be exported through its territory and always opposed the pipeline’s construction.

The BTC pipeline was one of the largest private construction projects in the world and is controlled by a consortium that includes BP and the US groups Chevron and ConocoPhilips, Total of France and the state oil company of Azerbaijan.

BP said it was confident the BTC pipeline was secure and not under threat from the current fighting in South Ossetia.

It said the fire in Turkey meant current supplies of oil were being diverted through other pipelines and by rail to ports on Georgia’s Black Sea coast.