Statement by H.E. Ambassador Baki İlkin, Permanent Representative of Turkey to the UN, at the Joint Press Conference Held at the United Nations on the Occasion of the Inauguration of the Baku-Tbilisi-Ceyhan Oil Pipeline

Baki İlkin 13.07.2006
Turkey is at an energy crossroad both in time and geographically. Three quarters of the world's established oil and gas resources are located in regions around Turkey. With the increasing dependence of developed and developing countries of Europe and Eurasia on Middle Eastern and Caspian oil, Turkey has emerged as an important energy hub. Given its unique geographical location between the Middle East and the Caspian regions on the one hand and the energy consuming markets on the other, Turkey stands as a key country in ensuring energy flow and security.

Latest developments have once again underlined the fragility of the energy markets, thus bringing to the fore the issue of security of energy supply. In this context, diversification of energy resources and routes has become one of the top priorities for European and other energy consuming markets.

The common challenge today is to guarantee affordable, secure and uninterrupted flow of hydrocarbon resources from the Greater Caspian Region and the Middle East to Europe and beyond.

It is with these considerations that the East-West Energy Corridor is being developed as an integral part of Turkey's energy strategy and Turkey is demonstrating this by developing oil and gas pipeline projects. The East-West Energy Corridor, which is being developed, aims at transporting Caucasian and Central Asian oil as well as natural gas to western markets through alternative routes. The main components of the Corridor are:

a)The Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline,
b)The Shah-Deniz natural gas pipeline (Baku-Tbilisi-Erzurum), and
c)The Trans-Caspian Natural Gas Pipeline projects as well as rail roads and other infrastructure.

A) The BTC oil pipeline, which is being officially inaugurated today, constitutes a major milestone in the realization of the "East-West Energy Corridor", with a capacity of 50 million metric tons per annum (1 million barrels per day). Recent developments have made the BTC pipeline even more important and effective. The signing of the Host Government Agreement on 16 June 2006, between Azerbaijan and Kazakhstan to extend this pipeline to Kazakhstan, will enable the flow of Kazakh oil to the Mediterranean through the Aktau-Baku connection. This will eventually double the capacity of the BTC oil pipeline.

B) The Baku-Tbilisi-Erzurum natural gas pipeline (BTE) project, also known as the Shah-Deniz natural gas pipeline, will enable the shipping of Azeri natural gas from the Shah-Deniz field to Turkey. This gas pipeline is being built in parallel to the BTC pipeline and the construction is expected to be completed within a year.

C) As to the Trans-Caspian Natural Gas Project, it will, when finalized and realized, transport Kazakh and Turkmen gas through Turkey to Europe and will further contribute to the diversification of routes and resources. Kazakhstan and Turkmenistan are important producers of natural gas. The Baku-Tbilisi-Erzurum natural gas pipeline will constitute the first leg of the Trans-Caspian Gas Pipeline which will carry Kazakh and Turkmen gas to western markets.

On the other hand, as a transit country and an energy hub, Turkey is actively involved in the realization of the pipeline projects which will carry oil and gas to the countries and consumers in Europe. In this framework, one of the projects is the Turkish-Greek Inter-Connector Project.

The Turkish-Greek Inter-Connector Project has now been extended into the Turkey-Greece-Italy Inter-Connector. The pipeline will have a capacity of 16 bcm (billion cubic meters) per annum. And there are other oil and gas pipeline projects under consideration or in the stage of negotiation.

The Ceyhan Terminal, where the inauguration has taken place in Turkey today, will be developed as an energy trading center for the entire region.

The BTC crude oil project also has an important environmental dimension for Turkey and the Turkish Straits. The pipeline will not only continue to transport Caspian oil to western markets, but also contribute to safety of navigation and protection of the environment in the Turkish Straits by limiting the number of transiting oil tankers and quantity of oil having to use this environmentally fragile waterway. The present heavy tanker traffic in the Turkish Straits has been and continues to be a cause of serious concern for Turkey. The possibility of an incident and even a possible explosion resulting from a tanker accident in the Turkish Straits would not only endanger the lives of thousands of people, but could also cause significant damage to the marine and coastal environment. In the worst case scenario, a disaster could result in the interruption of oil flow to world markets for weeks if not months. For this reason, alternative by-pass routes to the Turkish Straits play an important role in reducing and hopefully totally eliminating the risk of such an accident occurring.

Let me conclude by thanking every government, every company and every person who have contributed to the materialization of the BTC oil pipeline. Our special thanks go to the U.S. Administration, which has lent its full support to the realization of the project. I would also express our deep appreciation to the British Petroleum company, not only for being a major player and partner in this project, but also as an ardent advocate of the protection of the environment.