In addition to BTC, a Russian-backed Northern route carries oil across the Caucasus to the Russian Black Sea port of Novorossiisk. In March 2001, the Caspian Pipeline Consortium (CPC) commissioned the 990-mile, $2.5 billion, 1.34 million-bbl/d-capacity pipeline. From there, oil is transported through the Bosporus Straits. Turkey has raised concerns about the ability of the narrow and twisting Bosporus Straits to handle additional tanker traffic that will be necessary to handle the planned volume of oil to be exported via CPC, in addition to other oil shipments. Specifically, Turkey is concerned that a major accident and environmental disaster could take place right next to Istanbul, the countrys largest city. In addition, delays at the Bosporus can cost oil supertankers $30,000 per day (or more) in demurrage charges, and there reportedly have been delays of up to 30 days. Currently, more than 50,000 commercial ships per year transit the Bosporus, with oil flows of around 3 million bbl/d in 2003. Russias CPC oil exports through the Bosporus have been increasing, reaching approximately 450,000 bbl/d in 2004.To help resolve these problems, half a dozen or more Bosporus bypass options - aside from BTC - are under consideration in southeastern Europe and in Turkey itself. One possibility is a 1.2-million-bbl/d, $400-$900 million line running from Kiyikoy on Turkeys Black Sea coast to Ibrikbaba on the countrys Aegean Sea coast near the border with Greece. Russias Transneft had the lead on this project, but announced in March 2005 that it was pulling out. In addition, the Kiyikoy-Ibrikbaba line is opposed by environmentalists, since Ibrikbaba lies in a national park and the pipeline would pass near coral reefs in the Saronic Gulf. A rival option, led by Houston-based Thrace Petroleum, involves a similar route, from Igneada on the Black Sea to Saros Bay on the Aegean Sea.

In January 1997, Bulgaria, Greece, and Russia agreed on a plan to build an oil pipeline linking the Bulgarian Black Sea port of Burgas with Alexandroupolis on the Mediterranean coast of Greece. As originally conceived, the proposed 178-mile, $600 million, underground pipeline would allow Russia to export oil via the Black Sea while bypassing the Bosporus. However, the project has been stalled for several years by a wide range of technical and economic issues, including disagreement between Russia and Greece over transit fees. Other proposals for Bosporus bypass routes include a 1.1-million-bbl/d line from the Black Sea port of Samsun in northeastern Turkey to Ceyhan, the 570-mile, 750,000-bbl/d AMBO line between Burgas and the Albanian port of Vlore, and the SEEL line from Romanias port of Constanza to Italys Adriatic port city of Trieste. In December 2004, AMBO announced that front-end engineering and design (FEED) on the $1.2-billion pipeline would be completed in early 2005 following the December 28, 2004 signing of a memorandum of understanding (MOU) by ministers from Bulgaria, Albania, and Macedonia. Construction is expected to begin within the next 12 months for operation within three years. In November 2004, the governments of Romania, Sebia-Montenegro, Croatia, Slovenia, Italy, and Austria agreed to endorse SEEL and its connection with the TransAlpine pipeline, which supplies refineries in Austria, Germany and the Czech Republic. In February 2005, Hill International Company completed a feasibility study on the pipeline. Construction is scheduled to commence in late 2005, with flows of 480,000 bbl/d expected by 2007. In addition to looking at bypasses to the Bosporus, Turkey also has been attempting to increase capacity in the straits. To increase safety and improve traffic flow in the Bosporus, Turkey has constructed a $45 million radar-controlled Vessel Traffic and Management System, with ships monitored from a facility similar to an airport traffic control center.

Turkey has refining capacity of 802,275 bbl/d at 7 refineries. Refining and other downstream operations in Turkey are dominated by partly-state-owned company Tupras, which has four main refining complexes: Batman in the southeast, Aliaga near Izmir, Izmit near Istanbul (the countrys largest refinery, damaged during the August 1999 earthquake), and the Central Anatolian Refinery at Kirikkale near Ankara. In 2002, Tupras share of the Turkish fuels and lubricants market was around 78 percent, with other major retailers including BP, ExxonMobil, TotalFinaElf, Agip, and ConocoPhillips. Tupras is planning a fifth refinery -- a $700-$800 million facility near Yarimca in western Turkey -- to be completed by 2007. Tupras has a modernization program designed to switch output at its refineries towards lighter products and to meet European standards. Turkeys sole private refinery is Atas, with a capacity of 88,000 bbl/d, located near Mersin on the Mediterranean coast, a joint venture of ExxonMobil (51 percent), Shell (27 percent), BP Amoco (17 percent), and local company Marmara Petrol ve Rafineri Isleri AS (5 percent). A report in June 2004 indicated that Atas would shut down due to profitability concerns. In late June 2005, Tupras was granted a $128 million loan by the Turkish Finance Ministry to upgrade the Kirikkale refinery so it meets EU regulations. In July 2002, Turkeys government announced that it would sell its 25.8 percent share in POAS to the majority shareholder, Is Dogan Petrol Yatirimlari AS (Dogan). The announcement came amidst calls by the IMF for an acceleration in Turkeys privatization process. In October 2004, Dogan announced that it had dropped plans to sell its 47 percent stake in the company to foreign investors after failing to receive adequate offers. In June 2005, POAS applied for pre-qualification on a bid for Tupras. One of Turkeys next priorities for privatization in the energy sector is the countrys largest petrochemical producer, Petkim. In August 2003, Turkey announced the opening of a tender for sale of an 88 percent stake in Petkim after canceling another possible sale, for $605 million to the prominent Uzan family. In April 2005, 35.4 percent of the governments shares in Petkim were sold, mainly to foreign investors, for $267 million.