On 24 April 2007 with the participation of the Italian Minister for Economic Development Pierluigi Bersani and the Turkish Minister for Energy & Natural Resources Hilmi Guler, ground breaking ceremony for the new Samsun-Ceyhan pipeline was held. This pipeline linking two Turkish ports Samsun on the Black Sea and Ceyhan, located on the shores of the Mediterranean Sea.

The main parameters of the pipeline are length of 555 km; the diameter of the pipe varies between 42 to 48 inches. The pipeline is designed to transport up to one and a half million barrels per day. There will be constructed 4 pumping stations and 1 pressure reducing station for better transporting of the crude oil. The pipeline originates from Sariz, and then will run along the pipeline Baku-Tbilisi-Ceyhan pipeline until Ceyhan port. It also provides tank farm in Samsun will have storage capacity of 6 million barrels and the additional tank farm in Ceyhan 8 million barrels.

Construction of the pipeline conducted by the Italian company ENI and Turkish Çalik Enerji company. It’s planned that the project would be completed by 2010. The total project approximately cost is about 2 billion dollars. For the first time, the project has been planned since 2003, when the company ENI sought ways to transport crude oil produced in the northern part of the Caspian Sea, in other words from Kazakhstan. By the time there are functioned Caspian Pipeline Consortium through which produced Kazakh oil transported through Russia to the port of Novorossiysk on the Black Sea.

Known for its reputation of independent decision-making ENI this time has remained true to itself, continuing the search alternative routes for the delivery of hydrocarbons to the European markets. This condition will also guarantee ENI the opportunity keep pursuing own independent policies.

It was estimated that sooner or later the Turkish Bosporus straits will not be able to take all the volume of oil that will flow into the Black Sea ports for the transport of their tankers to world markets. Peak for excessive quantities of oil production in Kazakhstan and Azerbaijan were to grow by nearly half. Russia also increased their production. And even if the construction of the Baku-Tbilisi-Ceyhan pipeline that could be successfully completed, it would have enough oil, which could be transported through the pipeline Samsun-Ceyhan. But the events of recent months, jeopardizing the possibility of finding a free volume of oil transportation through this pipeline.

In early April of this year, Romania, Serbia, Slovenia, Italy and Croatia, and representatives of the European Commission signed Zagreb Declaration on the construction of Pan-European pipeline, which will connect the Romanian Black Sea port of Constanta to the Italian city of Trieste on the Adriatic Sea. This pipeline also will be built with the purpose to bypass the Turkish straits and it is scheduled to exports of oil from the Caspian region. It should be noted that this pipeline has not agreed with producers of oil in the Caspian Sea oil volumes. And it is possible that this pipeline will actively compete for oil transportation with Samsun-Ceyhan pipeline.

However, the main rival to take the pipeline project Burgas-Alexandropoulos signed 15 March 2007 in Athens, by the involved ministers of the three countries, under the presence of their leaders, Vladimir Putin (Russian president), Sergey Stanishev (Bulgarian prime-minister), and Kostas Karamanlis (prime-minister of Greece), the project will be the main competitor Samsun-Ceyhan, because one side of this project is Russia, a major supplier of oil to the Eurasian area.

Worse still, Kazakhstan also plans to join the project, which means that oil from Kazakhstan will pass through this pipeline. By 2012 Kazakhstan will join the Baku-Tbilisi-Ceyhan pipeline and additional quantities of oil transportation through the Turkish pipeline, there simply may not be. What can a draft Samsun-Ceyhan if first glance a non profitable condition?

In the first place is worth noting that the completion of the project is calculated to 210, while the Burgas- Alexandropoulos pipeline project will be completed only by 2012. During those two years, the supply of crude oil can be carried out through the pipeline and participants in the project will enter into a stable relationship with manufacturers, which in the future also may wish to export oil through this pipeline. But actually increase the chances of the project may be transformation of the port of Ceyhan to a centre of the oil industry, where the refinery constructions are planned. The participants of these projects are Indian and Azerbaijani companies. SOCAR with the Turkish company Turcas plans to build here refinery, at a cost of five billion dollars. India also plans to construct a refinery with a similar capacity.

For that reason it will be required to deliver additional portion of crude oil to the port Ceyhan, from which this oil now has been exported in the world markets. It seems  in this case may be that the owners of these refineries themselves will buy oil from suppliers, particularly from Russia and Kazakhstan, and will be interested in transporting oil via Samsun-Ceyhan as being the shortest and cheapest way.

This hypothesis enforced especially with the desire of Indian Oil Corporation which is announced that it will have a 12.5% stake in the pipeline project. The Indian company will be particularly interested in the transport of crude oil through Samsun-Ceyhan to own plant. Another factor increasing the chances of Samsun-Ceyhan for fulfilling of the pipeline is to the Azerbaijani company SOCAR with Kazakhstan to privatize part of the Turkish petrochemical company Petkim. In the case of successful purchasing of Petkim by Azerbaijan and Kazakhstan these two countries will be interested to transport oil to Ceyhan and for this purpose for Kazakhstan one route can be Samsun-Ceyhan pipeline.