Patience pays off for Ceyhan as BP sets date for first pipeline cargo

Lloyd's List, Special Report-Top Mediterranean Ports; Pg. 15 59164

May 15, 2006 Monday

The long wait is nearly over for the port of Ceyhan in Turkey as oil major BP has given its strongest indication yet that it will load the first cargo of Azeri crude from its $4bn Baku- Ceyhan pipeline at the end of this month.

The pipeline has been designed to carry Caspian oil to the West, sidestepping Russia and loosening its stranglehold on exports from the region while lowering Western dependence on Middle East oil. The route bypasses the shipping bottlenecks from the Black Sea to the Mediterranean at the Turkish straits. BP is set to load the shipment on May 27-29. The cargo is a trial one and no more have yet been scheduled, but it will still be a big boost for Ceyhan, which has been waiting nearly a year after a number of obstacles plagued the project.

"They will be testing the installations and equipment with this cargo," says an oil trader. "We will find out in the next few days if there are going to be exports from the pipeline in June." The giant pipeline has almost been filled with the 10.4m barrels needed to begin pumping. It has an initial daily capacity of 1m barrels of oil, projected to rise to 5m bpd within a decade.

The first cargo is likely to be a mix of some crude from the pipeline and oil that had been shipped from the Black Sea port of Supsa to speed the process of filling the storage capacity at Ceyhan. If the pipeline is working continuously, Ceyhan could handle more than 50m tonnes a day at its peak.

The Turkish government hopes to turn the port into a hub for oil sales in the Mediterranean, building on its growing reputation and exports. News of the first cargo from the pipeline is the second boost to the port this month after the Turkish government approved a pipeline from Samsun to Ceyhan. Eni and Calik Enerji plan to build the pipeline from the Black Sea to transport oil that would otherwise to shipped through the Bosporus and Dardanelles straits. 

The two oil companies have studied the pipeline project since 2002 and finished site surveys along the route and in the two port areas. Ceyhan Marine terminal has seven crude oil storage tanks, a metering station, waste water treatment, a vapour incineration facility and a 2 km jetty capable of loading two 300,000 dwt tankers simultaneously. Owned by the Transportation by Pipelines Company, it has a nominal capacity of 75m tonnes a year.

Very large crude carriers, which have limited access to Black Sea ports, can load crude from Ceyhan all year round and could take cargoes to European and North American markets. The government is keen to reduce tanker traffic through the strait and benefit from the pipeline tariff income.

New oil pipeline to boost Ceyhan

Lloyd's List, Offshore Energy; Pg. 6 59160

May 9, 2006 Tuesday

The Turkish port of Ceyhan is set to become a hub for oil exports after the government approved building a trunk pipeline from the Black Sea town of Samsun, writes Martyn Wingrove. Turkey's council of ministers gave the green light to the Samsun-Ceyhan oil pipeline, run by a joint venture between Italian oil group Eni and Calik Enerji.

Ceyhan will become a hub for oil sales in the Mediterranean, building on its growing reputation and exports in the coming years. The two companies plan to build a pipeline from the Black Sea to transport oil that would otherwise to shipped through the Bosporus and Dardanelles Straits.

"The project will guarantee the transportation to key markets of the oil produced in Russia and Kazakhstan," Eni chief executive Paulo Scaroni said. Very large crude carriers, which have limited access to Black Sea ports, are able to load crude from Ceyhan all year round and could take cargoes to European and North American markets.

The Mediterranean port is already a destination of northern Iraqi crude and will see the first Azerbaijan crude cargoes loaded this year once the BP-led Baku pipeline is fully commissioned. Eni is involved in the Samsun-Ceyhan pipeline to ensure its own crude cargoes from Kazakh fields can reach their market.

The Milan-based firm operates the giant Kashagan project, under development in the Caspian Sea, and is co-operator with BG Group in the onshore Karachaganak field. Eni and Calik have studied the pipeline project since 2002 and finished site surveys along the route and in the two port areas. They will co-operate on the project and are open to third parties interested in gaining transport capacity.

The Turkish government is keen to reduce tanker traffic through the strait and
wants to benefit from the pipeline tariff income. There are plans to build other pipelines to help by-pass the sea voyages through the strait, which can be delayed by several days due to weather conditions.