Baku - Officials inaugurated thefirst section of a 1,760-kilometer, U.S.-backed pipeline on Wednesday that will bring CaspianSea oil to Western markets, a project seen as an economic and political boon for the troubled Caucasus region. The presidents of Azerbaijan, Kazakhstan, Georgia and Turkey were on hand for the ceremony at the Sangachal oilt erminal, about 40 kilometers south of Azerbaijan’s capital, Baku, to open the taps for the firstdrops of oil to enter the Baku-Tbilisi-Ceyhan pipeline.

The pipeline from Baku to the Turkish Mediterranean portof Ceyhan is seen as a significant move toward reducing the West’s dependence on Middle Eastern oil. Most Caspian oilexports previously moved through Russian pipelines, often adding to the congestion in the Bosporus strait.

CAPACITY OF 1 MILLION BARRELS A DAY
The pipeline “will take new supplies of oil to the world market and will help to demonstrate that security is best achieved by having multiple sources of supply and trade routes,” BP PLC Chief Executive John Brown, whose company leads the consortium that built the pipeline, said at theopening ceremony.

The $3.2 billion project, with a capacity of 1 million barrels a day, is the first direct oil link between the landlocked Caspian, which is thought to containthe world’s third-largest oil and gas reserves, throughGeorgia en route to the Mediterranean.

The pipeline “opens a new era in the Caspian Basin’s development,” U.S. President George W. Bush said in aletter read by U.S. Energy Secretary Samuel Bodman. Bush, whose administration is seeking to diversify energy sources, called it a “monumental achievement.”

“The United States has consistently supported (thepipeline project) because we believe in the project’sability to bolster energy security, strengthen participating countries’ energy diversity, enhance regionalcooperation and expand international investment opportunities,” the letter said.


THE SILK ROAD OF OIL
Azerbaijan, Georgia and Turkey look to earn substantialrevenue from the pipeline, through transit fees and royalties. “I do not doubt that BTC will be of use both toAzerbaijan and our neighbors. This pipeline first of allwill help solve economic and social problems, but the role of the pipeline in strengthening peace and security in theregion also is not small,” Azerbaijan’s President Ilham Aliev said at the ceremony. Turkish President Ahmet Necdet Sezer said the pipeline “can be called the Silk Road of the 21st century.”

Azerbaijan is banking on the pipeline to raise its profilein the world and swing international support behind Baku inits dispute with Armenia over the Nagorno-Karabakh enclave,which ethnic Armenian separatists took control of more thana decade ago. The conflict continues to simmer, underminingthe region’s security.

IMPROVE LIVING STANDARDS
Georgia President Mikhail Saakashvili said the pipeline should help attract investment and improve living standards. Saakashvili has sought to lessen Russia’s influence on his impoverished country, which depends heavily on Russia for energy.
Pipeline officials said it would take up to a month and ahalf to fill the Azerbaijani section. The Georgian part will be ready after that, and then the Turkish stretch,which Turkish authorities have said should be filled by Aug. 15.

It will take approximately 10 million barrels of crude tofill the entire pipeline. Bodman said Tuesday thatdeliveries of oil from the pipeline to tankers at theterminal in Turkey are to begin in the fall. Once fully operational, the pipeline will represent a”significant” addition to Western oil supplies, said analyst Jason Kenney of ING Financial Markets, although thetime needed to fill it means “you won’t see exports untilthe later part of the year.”