Shell to be partner in Samsun-Ceyhan project, deal in June
Posted by meb at May 27th, 2008
Royal Dutch Shell will become a partner on the Samsun-Ceyhan oil pipeline project, which will transport Kazakh oil through Turkey, after signing an agreement next month to that end.
Çalık Enerji and Italy’s Eni S.p.A. have formed a 50/50 joint venture known as the Trans-Anatolian Pipeline Company (TAPCO) to build and operate the pipeline. Two sources told Reuters yesterday that Shell’s purchase of shares from TAPCO has been negotiated and that feasibility studies have almost been completed for the project. The same sources said an agreement on the partnership is expected by the end of June.
Shell could buy either from Eni or Calık’s shares, according to sources. Indian Oil had revealed at the end of 2006 that it would have a 12.5 percent share in the project, but the company has not yet been listed as part of TAPCO. Running north-south across Turkey, the Samsun-Ceyhan pipeline saw construction begin in April of last year, and its aim is to reduce oil tanker traffic on the Bosporus. Expected to cost $1.5 billion, the pipeline will be 555 kilometers in length. The TAPCO project is expected to produce 1 million barrels of oil per day when operations begin and as much as 1.5 million barrels per day by 2010.
Shell and Eni are also partners in the Caspian Oil pipeline consortium, which was established to carry oil produced in the Kashagan region of Kazakhstan. The daily oil production of Kazakhstan is more than 1.3 million barrels and its export volume exceeds 1 million barrels per day, with most of this transported via the Black Sea, the Bosporus and the Dardanelles.
Sources said a “throughput guarantee” would be provided by the multi-member consortium, including Shell, Eni and the Offshore Kazakhstan International Operating Company (OKIOC). The consortium had struck oil at Kashagan, well off Kazakhstan’s Caspian coast and a region said to be the most important oil discovery in the world in the last 30 years.
For analysts, the TAPCO project was strategically a very important step to render Turkey an energy hub while reducing the density of traffic on the crowded Bosporus Strait. It is also seen as an effort to create an alternative to Russia’s increasingly dominant position in supplying Europe with vital energy resources. Russia is said to be aiming to thwart this effort by implementing an alternative project - the Burgas-Alexandroupolis pipeline - which will carry Russian natural resources to the Aegean Sea, bypassing Turkey, through Bulgaria and Greece.
The US is also backing the TAPCO project, which it sees as diminishing Russia’s importance in European politics. On the day of the groundbreaking ceremony for TAPCO last year, the US Embassy issued a written statement praising the initiative and wishing it success. The statement said the US strongly supported the concept of multiple pipelines to enhance global competition and to ensure the diversity and security of energy supply. “We wish the Samsun-Ceyhan project well in gaining oil throughput commitments to achieve its commercial success. Building on the success of the Baku-Tbilisi-Ceyhan oil pipeline, we are supportive of the development of Ceyhan as an energy center,” the statement noted.
source: Today’s Zaman
Related posts: