Robert M. Cutler on Energy and Eurasia

CPC vs. BTC?

After barrels of ink have been spilt in the 1990s explaining in the first instance why the Baku–Tbilisi–Ceyhan (BTC) pipeline could never be built and, since then, why there would never be enough oil to fill it, the Caspian Pipeline Consortium (CPC), which runs the line from northwest Kazakhstan to the Black Sea has decided to double its present capacity three years ahead of schedule because it turns out that there is enough oil in Tengiz, not to mention Kashagan, to command that capacity and CPC wants to compete for it. In this connection, it is noteworthy that "ConocoPhillips, Eni, Total SA and Inpex Corp.[, which] own 49.8 percent of Kashagan venture, &hellip also hold 15 percent of the Baku–Tbilisi–Ceyhan pipeline."

      But CPC will be unable to put a double-capacity line into service before 2009 at the earliest, whereas Kashagan producers will need to export beginning in 2008, while BTC will need non-Azeri throughput for its present single line until then while its own production ramps up to present capacity. Meanwhile, a SOCAR spokesman anticipates that a doubling of BTC throughput to 2 million barrels per day (bpd) would be possible early in the next decade, if some crude from Kazakhstan, whether Kashagan or Tengiz, were available to pick up the slack after the Azeri offshore fields reach production capacity sufficient to (over)fill current BTC throughput volume.