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United Press International

U.S. reassures Turkey on pipeline. By MARTIN SIEFF, UPI National Security Affairs Editor. Tuesday, June 29, 1999.

WASHINGTON - U.S. policymakers have moved to reassure the Turkish government they still are committed to construction of a pipeline from Baku in Azerbaijan across Turkey to the Mediterranean Sea.

Earlier this month, the Clinton administration authorized a feasibility study by the U.S. Trade and Development Agency on the possibility of building an oil pipeline across the Balkans from the port of Burgos in Bulgaria across Macedonia and Albania to the Mediterranean. Reports of this study provoked a wave of concern in Turkey that such a trans-Balkans pipeline might mean the United States was turning its back on the proposed pipeline from Baku to Ceyhan in southeast Turkey on the Mediterranean.

But U.S. government officials told UPI today that while the trans-Balkans pipeline or some other additional pipeline was likely to be built, Washington remained firmly committed to the Baku-Ceyhan project to pump oil from southern Caspian oil fields controlled by Azerbaijan.

U.S. officials said the trans-Balkan pipeline route will be studied as a way to transport oil pumped along a route from other Caspian Sea oil fields controlled by Kazakhstan to the Russian Black Sea port of Novorossiysk by the proposed Caspian Pipeline Consortium pipeline. Chevron announced in April that it had begun work on a marine terminal for the proposed CPC pipeline from the Kazakhstan-controlled Tengiz oil fields in the Caspian to Novorossiysk. This pipeline is scheduled to be completed by mid-2001 and to have an initial capability of 560,000 barrels per day, with a peak capacity of 1.5 million barrels per day. Oil tankers would then transport the oil from Novorossiysk across the Black Sea.

But the Russians and Western oil companies involved in the project are looking for ways to pipe the oil to the West without having to ship it through the narrow Turkish-controlled Bosporus strait, where possible oil spills could cause serious environmental hazards. Russia has pushed strongly for the building of this pipeline as it will give Russia a lucrative share in transporting the Caspian oil and a key strategic position controlling its flow. But the Turks fear that Moscow may seek to prevent the Baku-Ceyhan pipeline being built as a rival route. Among its other implications, the Baku-Ceyhan pipeline would make Azerbaijan, a Russian and Soviet-controlled nation for more than 150 years until its independence in 1992, finally free of Russia in economic terms and allow it close relations with Turkey, a fellow Turkic Muslim state.

Estimated costs of the Baku-Ceyhan route have soared in recent years from $2.5 billion to $4 billion. However, U.S. officials stressed that the Balkans route would complement the Baku-Ceyhan route if it was built rather than supercede it. ''The TDA study in the Balkans does not reflect in any way on our position on Baku-Ceyhan,'' a State Department official said today, speaking on condition of anonymity. ''The administration remains strongly committed to Baku-Ceyhan.''

Another U.S. official, also speaking on condition of anonymity, said that the TDA had also studied other possible pipeline routes through the Ukraine or through Romania to pump oil shipped from Novorossiysk to European consumers. ''One or more of these other pipelines (in addition to Baku-Ceyhan) is probably going to have to be built'' to cope with the expected volume of oil exports out of the Caspian, he said. This official said the trans-Balkan, Romania and Ukraine routes were all competing alternatives for the second pipeline route to pump the oil coming through Novorossiysk to the West. ''In essence, these other variants (of proposed routes) are competing with each other, not with Baku-Ceyhan,'' he said.

A third U.S. official, in the State Department, said, ''The State Department's official position remains multiple pipelines'' to export Caspian oil. On Monday, John Wolf, the recently appointed special adviser to Secretary of State Madeleine K. Albright on Caspian energy resources, reiterated the commitment to Baku-Ceyhan, according to the Itar-Tass news agency. He said in the Georgian capital of Tbilisi that there was no alternative to building the Baku-Ceyhan pipeline in order to transport Caspian oil (from Azerbaijan) to the West, Itar-Tass reported. The agency said Wolf and Georgian President Eduard Shevardnadze both called for the speedy adoption of a decision to push ahead with the long-delayed Baku-Ceyhan pipeline.