LONDON (Dow Jones)--The Baku-Tbilisi-Ceyhan crude pipeline, a key outlet for Caspian crude to global markets, is set to restart by this weekend after being knocked out of service two weeks ago following a blaze, BP PLC (BP) said Wednesday.
Repairs have been completed and testing of the pipeline's integrity will start Wednesday and run for the next couple of days before oil flows are ramped up, said Murat Lecompte, a BP spokesman in Turkey. BP operates the $4 billion pipeline.
The pipeline was operating at around 850,000 barrels a day - representing about 1% of the world's daily oil demand - before the incident. It will take several days for oil flows to hit that level once the pipeline restarts.
"The testing starts today and loadings at (the Turkish port of) Ceyhan will start from the beginning of next week, so you can infer that pipeline operations will restart by the weekend," Lecompte told Dow Jones Newswires by telephone.
The BTC pipeline, which has a capacity of 1 million barrels a day, brings crude from Azerbaijan's Caspian oilfields through Georgia to the Turkish Mediterranean port of Ceyhan.
With its 30.1% stake in the facility, BP is also likely to take a hit on revenue and profit from the BTC's closure the past two weeks, analysts say, though the extent of the financial impact on the U.K. oil company isn't yet known.
Lecompte said an investigation continued into the cause of the fire, which happened on Aug. 5 on the Turkish side of the BTC. Kurdish separatists said they sabotaged the facility, but the Turkish government has said no evidence supports that claim. The Turkish side of the BTC is managed by Botas International Ltd.
Lecompte said it was unclear how many tanker loadings might take place early next week, but said the lifting program at Ceyhan will be updated Wednesday.
A BP spokesman in London said the force majeure the company called on BTC deliveries remained in place despite the latest developments. The force majeure, which was called soon after the pipeline incident, gives BP legal cover for not meeting its contractual obligations on oil deliveries.
A BP official in Georgia said Wednesday that the 150,000 barrel-a-day Baku-Supsa pipeline would remain shut as a precaution because of the conflict between Russia and Georgia over the autonomous Georgian region of South Ossetia. BP, the largest shareholder in the Baku-Supsa pipeline, closed it on Aug. 12.
Oil markets shrugged off the BTC's planned restart as oil traded higher. Nymex October light, sweet crude traded up around $1.50 at around $116 a barrel at 1355 GMT.
Smaller shareholders in the BTC pipeline include Chevron Corp. (CVX) and ConocoPhillips (COP) of the U.S., StatoilHydro ASA (STO) of Norway, Italy's Eni SpA (ENI.MI) and France's Total SA (TOT).