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Georgia: Regional Leaders Inaugurate Oil Pipeline Amid Environmental Concerns

U.S. energy secretary and the leaders of Kazakhstan, Turkey, Azerbaijan, and Georgia during an opening ceremony of the BTC pipeline at the Sangachal oil terminal The presidents of Georgia, Azerbaijan, and Turkey today inaugurated the Georgian section of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, as it is commonly referred to. The ceremony took place nearly five months after the conduit’s Azerbaijani section was opened in Baku. Azerbaijani crude oil is expected to reach the Turkish Mediterranean coast through that pipeline before the end of this year.

Prague, 12 October 2005 (RFE/RL) -- The ceremony took place in the small town of Gardabani, some 30 kilometers southeast of the Georgian capital, Tbilisi.

BP Group’s Executive Officer Iain Conn and a string of Western oil executives also attended the gathering.

BP leads the international consortium in charge of building the pipeline that links Azerbaijan’s vast Caspian Sea oil fields to the Turkish Mediterranean port of Ceyhan, through Tbilisi.

Other consortium members include Azerbaijan’s State Oil Company; Turkish Petroleum; Unocal, ConocoPhillips, and Amerada Hess of the United States; Japan’s Itochu and Inpex; Norway’s Statoil; Italy’s Eni; and France’s Total.

The United States has supported the project from the beginning, seeing it as a way to provide the world with alternative oil supplies and loosen Russia’s energy grip on the South Caucasus.

The European Bank for Reconstruction and Development and the International Finance Corporation, the private arm of the World Bank, are among the BTC’s main sponsors.

During today's ceremonies, Georgian President Mikheil Saakashvili paid homage to his Azerbaijani counterpart, Ilham Aliyev. He also said the economic benefits the BTC has already brought Azerbaijan should serve as a model for his country.

“We are glad to see that Azerbaijan is developing in a way that suits Georgia. Azerbaijan is becoming a rich country, a country where social infrastructures are developing, a country where the economy is developing, and a country where there are structures that help improve the peoples’ lives," Saakashvili said. "I am glad to see that Azerbaijan has a leader [Ilham Aliyev] who not only represents a great hope for his people and whose achievements are obvious, but who is also a man very close to [Georgia].”

Civil rights groups in Georgia and abroad, however, have criticized the BTC for damaging roads and irrigation systems and for posing a threat to the environment. Concerns are particularly high with regard to the Borzhomi national park, through which the BTC runs for some 25 kilometers.

In a 45-page report released yesterday, an international nongovernmental group known as CEE Bankwatch Network details the violations of environmental safety it says were committed during the construction of the BTC.

The group says those infringements include widespread damage to cultural heritage sites and failure to comply with international nature preservation standards. It also claims that by damaging potable water supply systems and depriving local populations of crops and lands, the BTC “has turned out to be a barrier blocking the chance to escape poverty.”

CEE Bankwatch Network monitors the activities of world financial institutions and their social and environmental impact in Europe and the former Soviet Union.

Ketevan Kvinikadze, who monitors the legal aspects of the BTC project for the Georgian Young Lawyers Association, today accused the BTC consortium of violating the country’s labor legislation.

“Under Georgia’s labor legislation, an employer can hire a person for a maximum of 120 hours of work per [month]. However, Georgian citizens building the Baku-Tbilisi-Ceyhan pipeline often work more than 120 hours a month. The rights of these people are grossly violated," Kvinikadze said.

Consortium members did not immediately react to Kvinikadze’s accusations.

Saakashvili today acknowledged that his government would have done “certain things differently” if it had been in power during the initial phase of the BTC project. But he nonetheless reiterated his support for the pipeline.

Preliminary work on the BTC started in 2001, and its construction ended up costing some $1 billion more than the $3 billion originally planned.

The conduit stretches for 1,760 kilometers, including 440 kilometers through Azerbaijan and 250 kilometers through Georgia.

The Azerbaijani section of the BTC was inaugurated on 25 May at a ceremony near Baku.

Kazakh President Nursultan Nazarbaev, who attended the Azerbaijani launching, then expressed his willingness to connect his country’s pipeline network to the BTC. Kazakh Energy and Natural Resources Minister Vladimir Shkolnik has indicated that an official agreement to that effect could be signed this month.

The first Azerbaijani oil reached the Georgian border in August. It is expected to cross into Turkey later this month.

The BTC will not run at full capacity until 2009, when production reaches its peak in Azerbaijan. The pipeline will then carry an expected 1 million barrels of oil per day.

Next year, the oil conduit is scheduled to be coupled with a natural gas pipeline that will stretch between Baku, Tbilisi, and Turkey’s eastern Anatolian city of Erzurum.

Saakashvili said that once those two projects are completed, Georgia will be energy independent.

“We will soon host a gas pipeline. This gas pipeline means real economic and energy independence for Georgia. This is why today is a historic day for us. Of course, we must be patient. But the main thing is that our region has ceased to be a dead end. Our region is becoming important, and our country can now choose among several alternatives [for its energy supplies],” Saakashvili said.

Until the Baku-Tbilisi-Erzurum pipeline is operational, Georgia will remain heavily dependent on Russia for its natural gas supplies.

Saakashvili earlier this year floated the idea of selling Georgia’s main gas import pipeline to Russia, arguing that his government did not have enough financial resources to maintain it.

However, the United States last month agreed on a $295 million grant package to help Tbilisi implement a number of rehabilitation projects -- including refurbishing its main trunk gas pipeline.

Under the terms of the deal -- signed by the Millennium Challenge Corporation on behalf of the U.S. government -- the Georgian government has no right to sell part, or all, of the pipeline to any third party without Washington's consent.

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