BP Halts BTC Oil Loading, Pipe Shutdown to Last Weeks

By Eduard Gismatullin and Ayla Jean Yackley

Aug. 7 (Bloomberg) -- BP Plc and partners are likely to stop crude oil exports from a Turkish port tomorrow because of the explosion at a pipeline from Azerbaijan, which may take weeks to repair, officials at Turkey's pipeline operator said.

The Mediterranean port of Ceyhan loaded the last two tankers and no new vessels are scheduled for cargoes, Ebru Akdogan, a spokeswoman for BTC Co., said by phone today. The remaining oil in the port's tanks won't be exported, she said.

The Baku-Tbilisi-Ceyhan pipeline, or BTC, may be shut for as long as two weeks after the blast and fire halted shipments, Ali Gungor, the governor of Turkey's Erzincan province where the blast occurred, said in a phone interview today, citing information from a repair team that's studying the extent of the damage.

BP and partners have cut crude extraction at the Azeri- Chirag-Gunashli fields in the Azeri portion of the Caspian Sea, Tamam Bayatly, a Baku-based spokeswoman at BP, said by phone today. BTC was pumping about 800,000 barrels of oil a day before the fire, she said.

Natural gas production was also reduced at the BP and StatoilHydro ASA-led Shah Deniz field in the Caspian Sea, because of limited export capacity, Bayatly said today. The Shah Deniz venture had to stop gas condensate supplies into the BTC pipeline after the accident, she said.

The BTC pipeline may be shut down for as long as five weeks, Dow Jones news service reported today, citing an unidentified spokesman at Turkish pipeline company Botas International Ltd. Huseyin Sagir, a spokesman at Botas International, told Bloomberg that it's impossible to say at this point how long the pipeline will be shut. The fire is still burning, in a ``controlled manner,'' he said.

Alternative Routes

Crude loading from Ceyhan, the Turkish Mediterranean port, is continuing ``for the time being,'' Bayatly said. ``We've reduced our production as a precautionary measure to manage our stock levels and are using alternative routes'' to export oil.

BP together with Exxon Mobil Corp. Chevron Corp., StatoilHydro, Inpex Holdings Inc. and some other partners are pumping crude into the Sangachal oil reservoir nearby Baku and into the Baku-Supsa pipeline to a Georgian port on the Black Sea coast. The companies are also sending crude through the Baku- Novorossiysk link to the Russian Black Sea coast and may use rail cars as well, Bayatly said.

PKK Fighting

The BTC pipeline was shut on Aug. 5 after an explosion sparked a fire at the stretch of the link in northeastern Turkey. The Kurdistan Workers' Party, or PKK, said it carried out a bomb attack on the pipeline, Firat news agency reported on its Web site today. The PKK has been fighting for autonomy in largely Kurdish southeast Turkey for two decades.

Repairs and tests may be complete between Aug. 12 and Aug. 14, Botas officials said earlier today.

The pipeline declared force majeure on pumping through crude, David Nicholas, a London-based spokesman at BP, also said today. Force majeure is a legal clause allowing suppliers to suspend contractual obligations because of events beyond their control.

The BTC pipeline is 1,768 kilometers (1,100 miles) long. Most of that is in Turkey, where four pumping stations and two metering stations are located. The port of Ceyhan has the capacity to hold up to 7 million barrels of crude and has a 2.5 kilometer-long jetty to allow the simultaneous loading of two tankers, according to BP.

To contact the reporters on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net; Ali Berat Meric in Ankara at and Ayla Jean Yackley in Istanbul at ayackley@bloomberg.net.