TRANSPORT ROUTES OF AZERBAIJANI OIL (BAKU-NOVOROSSIYSK, BAKU-SUPSA)

The way to transport Azeri energy resources to the global markets was one of the major trends of the new oil strategy established by National Leader Heydar Aliyev. Caspian oil is currently transported by 2 routes: Baku-Novorossiysk and Baku-Supsa pipelines.

A contract on the transportation of Azeri oil via Russia to the Black Sea port of Novorossiysk was signed in Moscow February 18, 1996. The trilateral contract concluded between the International Operating Company of Azerbaijan, SOCAR and Transneft reflected all legal and technical issues stipulating for the transportation of oil till the port of Novorossiysk. Russia confessed by paragraph 2 of the said contract that Azerbaijan is not the owner of oil and the producer of oil is its owner. That must be regarded as the important achievement reached by the new oil strategy of Azerbaijan. According to the initial provisions of the contract Azeri oil was transported by the north pipeline to the global markets on October 25, 1997.

Baku-Novorossiysk pipeline extends to 1330 kilometers with 231 kilometers in Azerbaijan. It is 720 mm in diameter.

The establishment of the alternative routes for transportation of oil was another important element in the oil strategy of the national leader. The alternativeness of the oil transportation not only put an end to the economic dependence of Azerbaijan on any other state but also corresponded to the national interests of the country. Considering all these facts the National Leader of Azerbaijan Heydar Aliyev carried out a wise and farsighted decision despite all difficulties and pressure. President of Azerbaijan Heydar Aliyev and President of Georgia E. Shevarnadze agreed on the establishment of Baku-Supsa pipeline in Tbilisi March 8, 1996. The trilateral contracts signed between International Operating Company of Azerbaijan, SOCAR and Georgia stipulated for the first Azeri oil from Azeri, Chyrag and Guneshli fields to be transported by the Baku-Supsa oil pipeline.

The first Azeri oil started to be transported by the Baku-Supsa pipeline on April 17, 1999. The major advantage of the pipeline was the transportation of net Azeri light oil to the global markets. At the same time the lower prices of the transportation of oil to Supsa and Novorossiysk were also the positive feature of the route. Thus, the pipeline transported oil for the price of USD 15,67 to Novorossiysk and USD 13.14 to Supsa.

The Baku-Supsa pipeline extends to 837 kilometers to the west and 530 mm in diameter. Both pipelines transported 48.7 million tons from 1999 till 2005 to the global markets and was introduced into the global markets.

Despite the positive and negative properties of both pipelines, national leader of Azerbaijan J. Aliyev adopted a wise decision on the necessity of the export of oil by both two pipelines. At the same time the oil potential of Azerbaijan forecasts the production of 45-50 million tons of oil in 2010. That also caused the necessity for the establishment of the main oil pipeline for the full export of oil. The perspective of the transportation of Kazakh and Turkmen oil through Azerbaijan also increased the necessity. Considering all that, national leader Heydar Aliyev initiated works for the implementation of Baku-Tbilisi-Ceyhan pipeline project.