TURKEY: Agreement with Russia on pipeline committee

08 July 1994

A decision about the method of transporting oil from Central Asia to the Mediterranean via Turkey has been deferred, as the parties concerned have agreed to set up a technical committee to examine the alternatives.

Representatives from Turkey, Russia, Kazakhstan and the US oil major, Chevron, which has a substantial concession in Kazakhstan, met in Ankara on 23 June to discuss the issues. However, a critical absentee was Azerbaijan.

Turkish officials say the technical committee will seek to clarify the situation following a number of conflicting announcements. Deputy Prime Minister Murat Karayalcin, visiting Moscow in the spring, said that Russian agreement had been reached for the transport of Central Asian crude to the Russian Black Sea port of Novorossiysk for shipment across the Black Sea to a Turkish port (MEED 22:4:94, page 20). From there, a pipeline would be constructed across Turkey to the Mediterranean.

This route would bypass the Turkish straits of the Dardanelles and Bosporus. Turkey favours such a solution because it will not increase shipping in these crowded waters.

Turkish officials say that objections include the fact that this route would require huge investment by Russia to increase capacity at Novorossiysk itself. The tanker loading jetty has annual capacity of only 32 million tonnes, and this is already taken up by Siberian crude.

Huge outlays would also have to be made on upgrading and expanding the pipeline system leading to the port from the main junction point at Tihoretsk, about 120 kilometres east of Novorossiysk.

Russia also wants Azeri oil output to travel via a spur to connect with the proposed Kazakhstan to Novorossiysk pipeline through Tihoretsk, perhaps by using the existing Tihoretsk to Baku lines. Turkish officials say this would require substantial investment to reverse the flow of the line between Tihoretsk and Baku.

However, Turkey also wants to purchase 3 million tonnes of oil annually from Russia, says Volkan Vural, a foreign policy adviser to Prime Minister Tansu Ciller quoted by Reuters. An oil deal on similar terms to those for an existing exchange of Siberian natural gas for Turkish goods and services would boost trade, he says. Volkan also said Ankara had no interest in excluding Russia from plans to transport oil from Kazakhstan and Azerbaijan to the West.

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