More oil tankers through the congested Bosporus

Author: Kostis Geropoulos

14 November 2010 – Issue : 911

ISTANBUL – As the ferry taking me to the Asian side of the Bosporus – Avrasya – brushes past a gigantic oil tanker, its dark silhouette looming over our small boat, I reflect that Turkey’s straits are going to see oil tanker traffic increase dramatically if Russia and Kazakhstan double the capacity of the CPC pipeline, which transports Caspian oil from Kazakhstan’s Tengiz field to the Russia’s Novorossiysk port on the Black Sea, and a Bosporus bypass pipeline is not built.

I was, after all, in Kazakh capital Astana two days earlier where Kairat Kelimbetov, the chief executive of Samruk-Kazyna, the state-owned firm which manages subsidiary KazMunaiGaz, reminded me that CPC (Caspian Pipeline Consortium) shareholders have agreed to enlarge the capacity of the pipeline to 67 million tons of crude a year from the current 30 million tons. “They have their own structure how to manage this process and we agreed from the beginning,” he said on 8 November.

A key component of the plan to double the capacity of CPC pipeline was Russia getting a deal to bypass the Bosporus. Russia Prime Minister Vladimir Putin was scheduled to arrive in Sofia on 13 November “to talk directly to the Bulgarians about energy cooperation and, of course, the number one item is the Burgas-Alexandroupolis pipeline,” Chris Weafer, chief strategist at Moscow’s Uralsib Bank, told me by phone earlier, referring to a long-stalled planned project pushed by Moscow offering an alternative route for Russian oil for bypassing the Bosporus and the Dardanelles. The project will have tankers unload oil at Burgas port where it would be transported through a 280-kilometers-long pipe to the Greek port of Alexandroupolis. The Bulgarian government has been dragging its feet on the Burgas-Alexandroupolis pipeline, citing environmental reasons.

The project competes with a similar pipeline agreed between Russia and Turkey last year to carry oil from the Turkish Black Sea port of Samsun to its Mediterranean port at Ceyhan. The Samsun-Ceyhan agreement was a critical factor in Russia retaining the transit of Kazakh oil. “In other words there was no way the CPC pipeline could have been doubled unless there was a deal on the bypass of the Bosporus,” Weafer said.

But he noted that Russia needs both projects. “Two reasons for that. One reason is that they need both projects in order to free up the Bosporus to get the oil out. The second reason why they want Bulgaria is it would increase Bulgaria’s economic dependency on Russia, something the Bulgarians have been very keen to avoid over the years,” he said, adding that environmental concerns are only part of the reason for Sofia’s objections to the project. For pure economic reasons, Bulgaria now had to agree a deal on South Stream gas pipeline and Russia is now hoping to extend that with a deal on the oil pipeline.

Weafer noted that Moscow needs the Burgas-Alexandroupolis and Samsun-Ceyhan pipelines built in order to get the oil out of the Bosporus so Russia can develop the Novorossiysk seaport as an alternative goods port in the Black Sea. And it won’t happen if ships are queuing up behind oil tankers to get out of the Bosporus.

KGeropoulos@NEurope.eu

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via More oil tankers through the congested Bosporus – New Europe.