Turkey’s Botas withdraws lawsuit against BTC project

Turkey’s Botas withdraws lawsuit against BTC project

Botas, the operator of the Baku-Tbilisi-Ceyhan pipeline in Turkey, has withdrawn a lawsuit against the pipeline project, Haberturk newspaper said Friday.

Earlier, Botas International Limited (BIL) filed a lawsuit against the project claiming that if the company continues to operate the BTC under the existing terms, it will incur losses to the tune of $2 billion by 2045.

Turkey and Azerbaijan made changes to the package of their energy deals in October 2011, which included amendments to the agreement on the BTC pipeline designed to supply Azerbaijani oil to world markets. The amendments will bring Turkey additional revenue worth $3.7 billion.

Botas’s main losses occurred due to the increased cost of gas from Shahdaniz, Azerbaijan’s largest gas field in

the Caspian Sea, used by the company at the BTC pipeline pumping stations.

Besides revenues resulting from the changes made to the agreement, the Turkish company will receive compensation worth $100 million.

The BТС’s total length is 1,768 kilometers, including a 443 km section running via Azerbaijan, a 249 km section crossing Georgia and a 1,076 km section passing through Turkey. The pipeline transports oil produced from Azerbaijan’s Azeri-Chirag-Gunashli (ACG) block of fields in the Caspian Sea and condensate from the Shahdaniz field.

The conduit, operated by the international consortium BTC Co, allows to export crude from the oil-rich Caspian Sea without increasing tanker traffic through the crowded Turkish Straits.

BTC shareholders include BP (30.1% – operator), SOCAR (25%), Chevron (8.9%), Statoil Hydro (8.71%), TPAO (6.53%), ENI (5%), Total (5%), Itochu (3.40%), Inpex (2.5%), ConocoPhillips (2.5%) and Hess (2.36%).

 

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