New route for Azeri oil

December 15, 1998, 00:00 CET

Oil from Azerbaijan - including resources belonging to Statoil - began to flow through the western pipeline to Georgia on Thursday.

Brought on stream by the Azerbaijan International Operating Company (AIOC), this line is the second to export production from Azeri-Chirag in the Caspian. Statoil has an 8.56 per cent interest in that field.

The route runs from the Sangachal terminal 40 kilometres south of Baku, capital of Azerbaijan, to the Georgian port of Supsa on the Black Sea.

First oil is expected to reach the Georgian border by the end of the year, and plans call for the first tanker consignment to be loaded at Supsa in April.

Transport capacity in the pipeline is 115,000 barrels per day, with opportunities to expand this up to 220,000 barrels per day. Rights to use the line extend for 30 years.

Rehabilitation of this western route has been under way for two years at a cost of USD 560 million. Work on the Azeri section of the line has ended, and is approaching completion in Georgia.

Oil from Azeri-Chirag is already being exported through the northern pipeline, which runs from Sangachal to the Russian Black Sea port of Novorossiysk. Opened in October 1997, part of this route runs through Chechenia.

"Opening the western line will improve the security of oil deliveries from Azerbaijan," comments Steinar Storm-Olsen, project manager for the Statoil-BP alliance's interests in the AIOC.