BP opens gas taps into Georgia pipeline

August 14, 2008
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, LONDON, August 14 – Energy giant BP said on Thursday that it had resumed pumping gas into the South Caucasus pipeline in Georgia and that the Baku-Supsa oil link remained shut.

"We are pumping gas again into the South Caucasus pipeline," a company spokesman told AFP.

On Tuesday, BP had stopped pumping into the South Caucasus pipeline (SCP), which snakes from Baku in Azerbaijan into Georgia and to the Turkish border, as a precautionary measure amid fighting between Russian and Georgian troops.

However, the high pressure inside the pipeline, which is also known as the Baku-Tbilisi-Erzurum (BTE) link, meant that gas supplies were still flowing this week.

"There was very little disruption" because gas remaining in the pipeline was still reaching Turkey, the BP spokesman added Thursday.

He added: "The Baku-Supsa pipeline remains suspended for the time being. It goes through the middle of the country.

"It\’s a different route from SCP so we\’re still assessing the security implications and that remains suspended."

BP had closed the Baku-Supsa line on Tuesday because of fighting in Georgia but had said that oil and gas supplies continued to flow from the Caspian Sea to the West by other routes.

Analysts have played down the market impact of the two pipeline suspensions, arguing that operations would likely resume quickly after Moscow\’s order to halt its military offensive in Georgia.

Georgia is not an oil producer but its conflict with Russia has raised concerns in the oil market because the country is a key transit point for crude oil and gas exports from Azerbaijan to energy-hungry Western markets.

Supply from the region is already hampered by the closure of the key Baku-Tbilisi-Ceyhan (BTC) oil link, which BP also operates.

The BTC line — the world\’s second-longest pipeline — was shut last week after a blast in a pump at a section in eastern Turkey. The fire was put out on Monday.

The 1,774-kilometre (1,109-mile) BTC pipeline carries oil from Azerbaijan to Western markets via the Turkish Mediterranean port of Ceyhan, and is capable of transporting 1.2 million barrels of crude per day.

Barclays Capital analysts said that attacks on the BTC pipeline had a greater impact on global energy supplies than unrest in Georgia.

"While the conflict in Georgia may have been the main source of attention, for us the most significant supply event was the attack on the BTC line in Turkey and the implication that it may continue to be a target, and one the length of which makes it virtually impossible to defend comfortably," they wrote in a note to clients on Wednesday.

The Paris-based International Energy Agency warned earlier this week that fighting in Georgia threatened the strategic energy hub.

"Recent escalation in military engagement between Russia and Georgia poses a threat to certain key oil and gas pipelines which transit Georgia," the IEA said in a monthly report that was published on Tuesday.

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