OIL

Trans-Caspian Pipeline Capacity Could Be Boosted

ASHGABAD, March 18

(AFP)

The developers of a Trans-Caspian gas pipeline may boost its planned capacity to end a squabble between Turkmenistan and Azerbaijan that is delaying the US-backed project, the head of the route's consortium said on Friday.

The pipeline, originally intended to have a maximum capacity of 30 billion cubic meters (bcm) of gas annually, could carry up to 38 bcm, Edward Smith, president of PSG International which heads the consortium, told journalists.

The increased volume would satisfy both Turkmenistan and Azerbaijan, who are seeking to earn hard currency through gas exports through the proposed 2,000-kilometer (1,250-mile) pipeline.

�We're trying to take the most prudent approach from a design basis and a commercial basis in moving forward in anticipation of both Azeri interests and fulfilling the 30-bcm vision of (Turkmen) President (Saparmurat) Niyazov,� he said.

The agreement to enlarge the pipeline's capacity removes a major stumbling block to the project, which Washington hopes will curb the influence of both Russia and Iran in the Caspian region.

Smith said he planned to present Niyazov with a development plan addressing a construction schedule, capacity and financing of the pipeline, which could be finished as early as 2002.

Oil industry experts have voiced doubts that the pipeline will be commercially viable, and Smith has failed to reveal where financing is coming from for the project.

Turkmenistan signed an agreement in May to provide 16 bcm of gas to Turkey annually and hopes to sell an additional 14 bcm to Europe.

Earlier this month, Azerbaijan dropped demands for half the proposed pipeline's capacity of 15 bcm, settling on only exporting five to eight bcm.

But Niyazov has refused to lower Turkmenistan's share of the gas exports to accommodate Azezi gas, saying the pipeline would not be commercially viable for his Central Asian country.