Wednesday, October 13, 2010

LUKOIL Considering Joining BTC Consortium

The Russian oil company LUKOIL may be interested in joining the consortium that runs the Baku to Ceyhan pipeline (BTC), according to the Russian language website The company, whose name is familiar to drivers in the eastern United States, would be taking advantage of excess capacity in the pipeline, according to RusEnergy consultant Mikhail Krutikhin. LUKOIL is reportedly in discussion on whether it should join the consortium and pay the member tariff, or pay the non-member tariff to use the pipeline. (Oil&Gas Eurasia, 06 October 2010).

The pipeline's current capacity is currently 1.2 million barrels per day, and the consortium is considering using chemical reagents to increase capacity in 2011 to 1.6 million barrels a day, according to SOCAR's Vagif Aliyev. The consortium is only pumping 900,000 barrels per day, however. (Oil&Gas Eurasia, 03 June 2010). This means there is an estimated excess capacity of 300,000-600,000 barrels per day that would be available for LUKOIL.

If LUKOIL joins the consortium it would be ironic, as one of the Clinton-era goals for the pipeline's tortuous route was to give Azerbaijan an export route independent of Russia (see map above.) LUKOIL's use of the pipeline would mean Russian oil flowing through Central Asian-controlled infrastructure, reversing the longstanding practice of Central Asian countries using Russian-controlled infrastructure to market its energy resources.

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