LONDON (Reuters) — BP said on Wednesday exports of Azeri oil from Turkey should resume next week after repairs to the $4 billion (2.1 billion pounds) Baku-Tbilisi-Ceyhan (BTC) pipeline damaged by a fire two weeks ago.
The line can pump up to 1 million barrels per day of oil, equal to more than 1 percent of world supply, from fields in the Azeri part of the Caspian Sea to Ceyhan in Turkey. Its closure had supported world oil prices, which fell initially on news that it was reopening.
"We’ve taken the decision to start dynamic integrity testing of the line today before a move to full operation," said BP spokesman Toby Odone. "This will involve some limited and intermittent flow of oil through the pipeline."
"For ship scheduling purposes, the lifting program at Ceyhan will be updated today to start loadings from the beginning of next week."
The closure of the pipeline, after an explosion on the line in Turkey on August 5, caused members of the BTC consortium to declare force majeure on exports from Ceyhan, freeing them from contractual obligations.
Kurdish separatist guerrillas claimed responsibility for the explosion, although Turkish energy and military officials said they doubted the blast was caused by sabotage.
Traders of Azeri oil, a high-quality crude priced at a premium to many others, said oil tanker loading at Ceyhan would resume on Monday should testing of the pipeline go smoothly.
Oil prices traded lower on Wednesday following news of the restart, and later rose. U.S. crude oil was up $1.72 at $116.25 a barrel as of 2:05 p.m.
The timetable to restart the pipeline is in line with commen’s from Turkish officials this week.
Turkish Energy Minister Hilmi Guler told a news conference on Monday that oil flows through the pipeline should resume within a few days, earlier than previously expected.
London-based BP owns 30.1 percent of BTC, while Azeri state energy firm Socar holds 25 percent.
Other shareholders include U.S. oil companies Chevron and Conoco Phillips, Norway’s StatoilHydro, Italy’s ENI and France’s Total.
Due to the disruption, the BP-led Azeri-Chirag-Gunashli oilfields in the Caspian Sea had cut output to about 250,000 bpd from about 850,000 bpd before the BTC link was damaged, according to industry sources.
BP is the largest shareholder in the ACG fields with a 34.1 percent stake.
While the Baku-Ceyhan link is in the process of reopening, two other routes for the export of Azeri oil through Georgia remain shut due to fighting between Russia and Georgia.
BP said on Monday exports of Azeri oil by rail to Georgia had stopped after the railway line was damaged in Georgia, which accused Russian troops of blowing up a railway bridge.
Another export route, a pipeline from Baku to the port of Supsa in Georgia, was shut as a precaution due to the fighting in Georgia.