The Azerbaijan Government and BTC Co, operated
by BP, On February 3rd hosted an official ceremony during
which the final package of project finance documents was signed
to finance BTC construction. The signing ceremony, which took
place in the Gulustan Palace in Baku, marks the completion
of agreements covering the third party financing for the pipeline
project.
The BTC financing agreements were signed by representatives
of the Governments of the Azerbaijan Republic, the Republic
of Georgia and the Republic of Turkey and representatives
from the BTC lender group in the presence of the President
of the Azerbaijan Republic, H. E. Ilham Aliyev.
The financing package includes 208 finance
documents, with over 17,000 signatures from 78 different parties,
and it represents a major milestone in the implementation
of the financing arrangements for the pipeline which will
cost $2.95 billion to construct ($3.6 billion total project
cost including linefill and loan interest during construction).
Approximately 30% of BTC costs are being funded by equity
contributions, while the remaining 70% of the total is being
provided in the form of financing by third parties. The BTC
partners have already contributed $1 billion. The total debt
committed is $2.6 billion thus completing the funding for
the project.
President Ilham Aliyev addressing to
the audience
The group that will provide loans, export
credits and risk insurance to BTC comprises:
- The multilateral lending
agencies: the European Bank for Reconstruction and Development
(EBRD) and the International Finance Corporation (IFC),
the private sector arm of the World Bank
- The Export Credit
Agencies and Political Risk Insurers of seven countries:
the Japan Bank for International Cooperation (JBIC) and
Nippon Export and Investment Insurance (NEXI) of Japan,
the Export-Import Bank of the United States of America,
the Export Credits Guarantee Department (ECGD) of the United
Kingdom, the Overseas Private Investment Corporation (OPIC)
of the United States, Compagnie Francaise pour le Commerce
Exterieur (COFACE) of France, Euler Hermes Kreditversicherungs-AG
(HERMES) of Germany and SACE S.p.A. – Servizi Assicurativi
del Commercio Estero (SACE) of Italy.
- A syndicate of 15 commercial
banks led by ABN AMRO, Citibank, Mizuho and Societe Generale
with Banca Intesa, BNP Paribas, Credit Agricole Indosuez,
Dexia, HypoVereinsbank, ING, KBC, Natexis Banques Populaires,
San Paolo IMI, West LB and Royal Bank of Scotland
- Loans provided by BP, Statoil,
Total and ConocoPhillips, as senior sponsor lenders.
Finalisation of the financing agreements comes after more
than two years of reaching monitoring and scrutiny of the
project’s environmental and social impact, as well
as a thorough public consultation process. The loans are
conditional on the project continuing to meet its stringent
public commitments - which are subject to formal, quarterly
audits by lenders.
The participation of the multilateral, export
credit and insurance agencies enhances transparency in the
project, and gives them the opportunity to influence project
implementation, and to help ensure the development potential
from the projects is realised. |
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(continues)
To date, construction work has progressed significantly with
the overall project now more than 50 percent complete. Some
760 km of the right of way (ROW) has been prepared, 580 km
of pipe strung, 520 km of pipe welded, 270 km of the pipeline
corridor trenched, 235 km of pipe lowered-in and 215 km already
backfilled. Today, there are construction activities at 17
sites in all three countries.
The signing of financing document
with international financial institutions
The pipeline employs over 12,000 people along
its entire route from Baku to Ceyhan. The project’s
community investment programme is up and running in all three
countries. Overall BTC together with the South Caucasus Pipeline
(SCP) will spend some $30 million (including $5.5 million
already awarded in Azerbaijan) on community and environmental
investment between now and 2006 in Azerbaijan, Georgia and
Turkey.
Speech from Mr. David Woodward,
CEO of BP in Azerbaijan
Notes to Editors:
- The 1,760 km BTC pipeline
will allow one million barrels of oil a day to be exported
safely and responsibly from the Caspian without increasing
tanker traffic through the Turkish Straits. It is buried
for its entire length and, once constructed, land will be
fully re-instated above a narrow eight-metre right of way.
Landowners and land users have been generously compensated
for disruption during the construction phase and will be
able to use their land after construction, subject to a
small number of restrictions imposed for safety reasons.
- First oil from the pipeline
will be exported from the Mediterranean port of Ceyhan in
2005
- A parallel loan covering
the Phase 1 offshore development of the Azeri-Cirag-Gunashli
(ACG) oil field has also been agreed by BP, Unocal, Statoil
and Hess. The documentation providing for a series of loans
by IFC and EBRD totalling approximately 120 million dollars
became effective on the 3rd of February 2004 also. The BTC
export pipeline will carry oil from the ACG field from 2005.
It will account for the majority of the throughput of the
pipeline during its early years of operation.
The BTC Co shareholders are: BP (30.1%);
SOCAR (25.00%); Unocal (8.90%); Statoil (8.71%); TPAO (6.53%);
Eni (5.00%); Total (5.00%), Itochu (3.40%); INPEX (2.50%),
ConocoPhillips (2.50%) and Amerada Hess (2.36%).
For further information please contact:
Tamam Bayatly or Gulnar Hall, BP Press Office, Baku
Tel: (+994 12) 97 90 00
Fax: (+994 12) 97 97 36 |