First explosion on Baku-Tbilisi-Ceyhan (BTC) line
Results in Azerbaijan's maini pipeline closure
August 5, 2008

On-going series: Crisis in the Caucasus - 2008
The Russian / Georgian Conflict and Its Impact on Azerbaijan

(Oil from Baku, Azerbaijan, still sent via train to Batumi (Georgian port on the Black Sea).
An explosion in the Turkish section of the Baku-Tbilisi-Ceyhan (BTC) pipeline near Erzincan forced BOTASH to close the line. With a pre-explosion flow of approximately 850,000 barrels per day (bd) and throughput capacity of 1 million barrels per day (mbd), the $4 billion, 1,099-mile BTC line was capable of supplying roughly 1 percent of global oil demand via the Mediterranean Sea (see Figure 1).

BTC Explosion and the Russian and Georgian War: How Big a Threat to Caspian Oil Exports?
Cambridge Energy Research Associates®, Inc. (CERA)

The explosion occurred about 11 p.m. on Aug. 5, 2008, on the BTC pipeline segment at Yurtbasi village; after Ankara was notified, valves 29 and 31 were closed as officials waited for the oil contained in the 4-mile segment of No. 30 terminal to burn out.
The significance of a PKK attack against BTC would extend far beyond Turkey.

British Petroleum heads the BTC consortium and, besides operating the pipeline, has a 30.1-percent share of the project, exceeding that of the State Oil Co. of Azerbaijan, which owns 25 percent. Other Western investors include Chevron (8.9 percent), Norway's StatoilHydro (8.71 percent), Turkey's Turkiye Petrolleri Anonim Ortakligi (6.53 percent), Italy's Eni/Agip group and France's Total (5 percent apiece), Japan's Itochu (3.4 percent), the Japanese Inpex Corp. (2.5 percent) and the American Hess Corp. (2.36 percent). Western concerns receive 75 percent of BTC's revenues.

For Turkey, BTC's transit revenues are payback for supporting Western sanctions since 1991's Operation Desert Storm, as Ankara subsequently estimated in March 2003 that in supporting sanctions against Saddam's regime it had lost $80 billion in transit fees.
Security was a prime consideration in the BTC's design, and the consortium subsequently buried the entire pipeline to thwart possible attacks. BTC's eight pumping stations (two in Azerbaijan, two in Georgia and four in Turkey), however, are above ground, as are their electrical power grids. More than half of BTC traverses 669 miles of Turkish territory, nearly all of which contains significant Kurdish populations, as does the Kirkuk-Ceyhan pipeline.

If the rupture proves to be sabotage, it will savage Azerbaijan's economy, now one of the world's fastest-growing, which projects revenues from BTC as high as $230 billion over the next two decades. The economic fallout will not be limited to Turkey and Azerbaijan either; besides the massive revenue loss to Western BTC consortium investors, BTC now supplies an estimated 1 percent of global daily energy needs.
BTC pipeline explosion by John C.K. Daly, Washington (UPI).

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