5/28/2008

Shell to be partner in Turkish oil pipeline project

Today’s Zaman- Royal Dutch Shell will become a partner on the Samsun-Ceyhan oil pipeline project, which will transport Kazakh oil through Turkey, after signing an agreement next month to that end. Calik Enerji and Italy's Eni S.p.A. have formed a 50/50 joint venture known as the Trans-Anatolian Pipeline Company (TAPCO) to build and operate the pipeline. Two sources told Reuters that Shell's purchase of shares from TAPCO has been negotiated and that feasibility studies have almost been completed for the project. The same sources said an agreement on the partnership is expected by the end of June. Shell could buy either from Eni or Calık's shares, according to sources. Indian Oil had revealed at the end of 2006 that it would have a 12.5 percent share in the project, but the company has not yet been listed as part of TAPCO. Running north-south across Turkey, the Samsun-Ceyhan pipeline saw construction begin in April of last year, and its aim is to reduce oil tanker traffic on the Bosporus. Expected to cost $1.5 billion, the pipeline will be 555 kilometers in length. The TAPCO project is expected to produce 1 million barrels of oil per day when operations begin and as much as 1.5 million barrels per day by 2010. For analysts, the TAPCO project was strategically a very important step to render Turkey an energy hub while reducing the density of traffic on the crowded Bosporus Strait. It is also seen as an effort to create an alternative to Russia's increasingly dominant position in supplying Europe with vital energy resources.

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