BP’s Baku Tbilisi Ceyhan (BTC) Pipeline is an impressive achievement. Designed to carry up to one million barrels of oil a day across Azerbaijan, Georgia and Turkey, meeting the export requirements of the full field development of the ACG field, the project aims to relieve pressure on the Turkish Straits.
At the same time, BP has been careful to avoid environmental damage and causing any negative impact on local communities. Through three impact assessments, it has managed to minimise its footprint and ensure that the only impact on local people is positive.
Approximately 70% of BTC’s costs are being funded through financing by third parties.
The group providing loans, export credits and risk insurance is comprised of the European Bank for Reconstruction and Development (EBRD), the World Bank’s private sector arm, the International Finance Corporation, the export credit agencies from seven countries and a syndicate of 15 commercial banks.
The financing agreements were finalised in February 2004 after more than two years of monitoring and scrutiny of the project’s environmental and social impact, as well as a thorough public consultation process.
The participation of the lenders enhances transparency and gives them the opportunity to influence project implementation and ensure that the development potential is realised. In Turkey, the BTC pipeline is being constructed by BOTAS on behalf of BTC Co under a lump-sum turnkey agreement.
CARE FOR LOCAL COMMUNITIES
By creating the first direct pipeline link between the landlocked Caspian Sea and the Mediterranean, the BTC project will boost the regional economy and avoid increasing oil traffic through the vulnerable Turkish Straits.
In assessing possible new developments, BP routinely carries out environmental and social impact assessments (ESIAs) at the start of a project to minimise and avoid potential harm.
Three ESIAs were completed to cover the length of the pipeline and its associated facilities through Azerbaijan, Georgia and Turkey. International teams of independent consultants conducted the ESIAs, with significant input from national consultants and scientists in all three countries.
Underpinning the ESIAs was a set of goals to minimise the project’s footprint, including the right of way, temporary facilities and access roads. The objective was to avoid damaging protected ecological areas or archaeological sites, resettling people and causing permanent disruption to the livelihoods of local populations.
As a result of the route selection process, no one had to move because of the BTC project. The ESIAs were made available for public comment and consultation in mid-2002.
Consultation and dialogue with all stakeholders – including government and non-governmental organisations (NGOs) as well as communities and interest groups at local, regional and international levels – played a vital role in the assessment.
The communication and consultation process continued throughout the construction phase, with teams of locally recruited community relations staff meeting and sharing information with community members on a regular basis.
Together, the BTC Pipeline and the SCP projects will create economic wealth in the three nations through which they pass. BP and its partners have also determined that the projects should leave a lasting legacy of improvement at a more local level and are committed to demonstrating respect for the natural environment.
The pipeline projects have put these principles into action through community and environmental investment programmes. These are being carried out in partnership with local and international organisations, including NGOs, private sector concerns and universities.
The community investment programme (CIP) had a budget of $25m for the construction phase of the pipelines. Through the CIP, the BTC and SCP projects are working with 120 communities in Azerbaijan, another 72 in Georgia and 300 in Turkey.
ENSURING SAFETY STANDARDS
BTC Co is committed to the goal of making the project a model in all respects. In addition to overseeing internal affairs, external monitoring provides an important source of scrutiny, challenge and consultation necessary to help achieve this goal.
External monitoring involves multiple layers carried out, for example, by the Caspian Development Advisory Panel, of the lenders’ Independent Environmental and Social Consultant, of the Social and Resettlement Action Plan Review Team and local NGOs. Throughout operations, safety and security of people and operational facilities is paramount.
BP’s basic challenge as an organisation continues to be to develop an effective safety culture. BP operates an ISO 14001-certified environmental management system within the Azerbaijan business as an integral part of everyday operations. This demands continual improvement of environmental performance through the minimisation of operational impacts.
Operations of the BTC pipeline started up first in Azerbaijan with the beginning of line-fill at the head pump station at the Sangachal terminal in Azerbaijan on 10 May 2005. On 10 August, the first volumes reached the Azeri-Georgian border and on 17 November, line-fill proceeded into Turkey.
During the stage-by-stage line-fill and commissioning, the focus remains on rigorous testing to ensure the integrity and safety of each section prior to introducing oil.
The official inauguration of the Turkish section of the pipeline and the Ceyhan Marine Terminal was held in July 2006. The 1,076km Turkish section of the BTC export system includes four pump stations, two metering stations and the Ceyhan marine export terminal, which itself consists of seven one million barrel-capacity crude oil storage tanks and a 2.5km jetty to allow the simultaneous loading of two tankers of up to 300,000 deadweight tonnes.
Ten million barrels of oil, from the Azeri-Chirag-Gunashli (ACG)
fields in the Azerbaijani sector of the Caspian Sea, were required to fill the pipeline. The oil put into the pipeline at the Sangachal Terminal near Baku in May 2005 reached the Ceyhan terminal on 28 May 2006.
The first tanker loaded with oil that had flowed through the BTC pipeline, 1,768km across Azerbaijan, Georgia and Turkey from Sangachal to Ceyhan, sailed away from the Mediterranean coast of Turkey on 4 June. Since then, seven tanker cargoes of oil from the ACG field have been lifted from Ceyhan amounting to some 4.8 million barrels.
During this early phase, the pipeline throughput will vary but has been over 400,000 barrels per day. BP expects to steadily increase this volume to eventually reach one million barrels per day by 2008.
While the pipeline will continue initially to carry ACG oil, it is expected that in the future other volumes, including those from across the Caspian, will flow via BTC.