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New caspian oil pipeline bypasses russia { May 25 2005 }

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Caspian oil pipeline opens

Mark Tran
Wednesday May 25, 2005

Officials today inaugurated the first section of a 1,100-mile pipeline bringing oil from the Caspian Sea to the west, a project that has sparked environmental and human rights concerns.
The presidents of Azerbaijan, Kazakhstan, Georgia and Turkey attended a ceremony at the Sangachal oil terminal, about 25 miles south of the Azeri capital, Baku, to open the taps for the first drops of oil to enter the Baku-Tbilisi-Ceyhan (BTC) pipeline.

Natig Aliyev, the president of the state oil company of Azerbaijan, said: "Today's event marks the beginning of the long journey Azerbaijan's oil will take through three countries to world markets benefiting the people of the three countries on its route."

Most Caspian oil exports have previously moved through Russian pipelines. The new pipeline from Baku to the Turkish Mediterranean port of Ceyhan is seen as a significant move toward reducing western dependence on oil from the Middle East.

The largest private construction project in the world, the pipeline is part of a $20bn (10.9bn) series of energy developments to produce and transport oil and gas from the landlocked Caspian.

The $3.2bn BTC pipeline, with a capacity of 1m barrels a day, is the first direct oil link between the Caspian, thought to contain the world's third largest oil and gas reserves, and the Mediterranean.

Built by a consortium led by BP , it passes through Georgia en route to Turkey. Countries involved in the project hope to earn substantial revenue through transit fees and royalties.

"I do not doubt that BTC will be of use both to Azerbaijan and our neighbours. This pipeline first of all will help solve economic and social problems, but the role of the pipeline in strengthening peace and security in the region also is not small," the Azeri president, Ilham Aliev, said at the inauguration.

While the governments involved enthusiastically endorse the project, environmental and human rights have strongly criticised the scheme.

A report published last September by the Kurdish Human Rights project, the Corner House, Friends of the Earth and Environmental Defence expressed shock at the extent "the project is being breached of agreed standards, particularly on issues of land acquisition".

The groups voiced particular concern at the extensive use of emergency powers in Turkey to expropriate land for construction prior to compensation being paid to landowners.

BP, however, says it has set out to "raise the bar" and establish a new international benchmark in human rights and environmental standards.

The new benchmark extends to such diverse areas as leak detection, land acquisition, biodiversity and community investment, the oil giant says. It also points out that the pipeline is to be buried for its entire route so no one will be permanently displaced from their home.

"As we move into the operations phase, we are also developing a regional sustainable development programme, which will build upon the best practice of existing community investment programmes as well as addressing some of the regional and national challenges posed by the development of large-scale oil and gas businesses," BP said.

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