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. Last Updated: 07/27/2016

Baku Secures Loan to Keep $3Bln Pipeline on Schedule

BAKU, Azerbaijan -- Azerbaijan's state oil company has reached preliminary agreements with its partners in a $2.95 billion pipeline project that will keep construction on schedule until promised credit from international financial organizations comes through, the company's president said Thursday.

"Our partners will give us the necessary $180 million to $200 million so that we may continue financing our share of the project," Natig Aliyev, president of state oil company SOCAR, told journalists.

The 1,760-kilometer pipeline aims to bring Caspian Sea crude to the West, reducing dependence on Middle Eastern oil. The pipeline, from Baku to the Turkish Mediterranean port of Ceyhan, is on track to be finished by the end of 2004 and could be transporting oil in 2005.

The project has been strongly backed by the United States, although only two U.S. companies, Unocal and Conoco-Phillips, are participating.

The main backer is British oil company BP, which holds a 30.1 percent stake in the project.

Aliyev said the loan will allow SOCAR to continue key construction work through November, when the international credits are expected. After those financial credits are received, SOCAR will pay back the money, he said.

Aliyev said the exact amount of the loan and its conditions are still being worked out.

The international consortium building the project is expected to finance about 30 percent of the cost, while financial organizations pick up the rest in the form of credits.