US Ex-Im Bank oks $160 mln loan for Baku - Tbilisi - Ceyhan project

/Kazakhstan today, January 6, 04/ - The U.S. Export-Import Bank on Tuesday approved $160 million in repayment loan guarantees to support the export of U.S. equipment and services for building a huge pipeline to transport crude from the Caspian Sea region to Western markets. As Kz-today correspondent reports from Baku with the reference to official announcement of the bank, Ex-Im Bank adopted such a decision after submitting a profile on the project to the Congress and 35-day expecting period has elapsed. "U.S. participation in the project will support thousands of U.S. jobs among exporters and suppliers. Moreover, many countries will benefit from this pipeline, as it enables direct transportation of crude oil from Caspian Sea region to western markets through Mediterranean", said Ex-Im Bank Chairman Philip Merrill. According to the announcement, American companies will render engineering services, as well as services related to management and pumping systems. In considering natural environment aspects Ex-Im Bank collaborated with International Finance Organization (IFC), European Bank for Reconstruction and Development (EBRD) and export-credit agencies to ensure the project complies with international standards. This project is also financed by IFC, EBRD, American Corporation on private investments abroad and four commercial banks. Total cost of the project totals $3.6 bn. Total volume of to-be-borrowed funds including interests on loans will amount $2.6 bn. To construct Baku-Tbilisi- Ceyhan pipeline, $2.95 bn is required. As informed earlier, loans for BTC project will be given by four groups of lenders. The first will include international financial organizations (EBRD, IFC), which will finance the project by themselves and provide guarantees to commercial banks to finance deliveries of raw materials and equipment from 6 developed countries of the world - the USA, Great Britain, Japan, Germany, Italy and France. Third group will include commercial banks, which will be from 10 to 30 in number. The fourth group of lenders will include major companies such as BP, Statoil, Total and ConocoPhillips, which will provide loans for the project. From them BP is willing to give $500 m loan, Statoil - not less than $170 m. The Baku-Tbilisi-Ceyhan pipeline is owned by the Britain's BP Plc (30.1%) , Azeri state oil company SOCAR (25%), U.S. Unocal (8.9%), Norway's Statoil (8.71%) , France's Total (5%), Japan's Itochu (3.40%) , Italy's ENI (5%) and several other firms. The 1,094-mile pipeline will carry up to 1 million barrels per day from the Azerbaijan capital of Baku to Georgia's capital of Tbilisi and then to the Turkish Mediterranean port of Ceyhan. The oil will start flowing in 2005. [2004-01-06]