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Dept of Trade and Industry

Answer

Mr. Simon Thomas: To ask the Secretary of State for Trade and Industry (1) what percentage of the unburied pipes in the Baku-Tbilisi-Ceyhan pipeline coated with SPC 2888 have developed cracks in (a) Azerbaijan and (b) Georgia; [179982] (2) whether the Department was informed about the discovery of cracks in joints coated with SPC 2888 prior to the decision (a) to fund part of the Baku-Tbilisi- Ceyhan oil pipeline project and (b) to disburse funds approved for the project; and what action was taken by her Department; [179987] (3) when the Export Credits Guarantee Department was informed by (a) BP and (b) BTC Co. of the costs involved in rectifying the use of faulty coating in the Baku-Tbilisi-Ceyhan oil pipeline project; [179988] (4) when the Export Credits Guarantee Department was informed by (a) BP, (b) BTC Co. and (c) members of BTC Co. about the discovery of cracks in joints coated with SPC 2888 on the Baku-Tbilisi-Ceyhan oil pipeline; and what action was taken. [179990] Mr. Mike O'Brien: I am told that there has been no reported cracking to the pipes. None of the pipes are coated with SPC 2888 the field joint coating, which is only used on the joints. There were reports of minor hairline cracking in the field joint coating over joints. ECGD has been informed through a WorleyParsons desktop study report that the percentage of unburied coated joints that experienced cracking in the field joint coating was as follows: (a) 2.6 per cent. in Azerbaijan, and (b) 26 per cent. in Georgia. No pipes were buried with defective joint coatings. I am told that ECGD first became aware of the cracking in the field joint coating in February 2004. BP/ BTC had not informed ECGD before the allegations appeared in the Sunday Times article of 15 February 2004. ECGD was not aware of the cracking in the field joint coating prior to the decision to provide support on the Baku-Tbilisi-Ceyhan project, but were aware prior to the initial disbursement of funds. The lenders, including ECGD, considered this very carefully before the first disbursement was made. ECGD awaits the results of a site visit by Worley Parsons, but has been assured by BP that the rectification costs will be considerably lower than the US$500 million alleged in the Sunday Times article.

Secondary information

Type

Written question

Reference

423 c50-1W; 179982;179987;179988;179990

Session

2003-04

Subjects

Costs Construction Export credit guarantees Materials Baku-Tbilisi-Ceyhan oil pipeline

Link

View this Written question on www.publications.parliament.uk