Agreement Reached on Pipeline Route in Caspian Region

WASHINGTON — The presidents of Azerbaijan, Georgia and Turkey agreed on the legal framework for a $2.5-billion oil pipeline from Baku in Azerbaijan to the Mediterranean port of Ceyhan in Turkey, President Clinton announced Friday.

The agreement “brings the pipeline project a critical step closer to fruition,” Clinton said in a statement. “I look forward to the next phase of this effort when companies . . . transform legal frameworks into commercial reality.”

The Clinton administration has pushed the 1,200-mile Baku-Ceyhan route as an alternative to the current pipelines through Russia, or any route through Iran. Having the pipeline transit Turkey--a U.S. ally--is an important strategic consideration for the U.S., oil experts said.

BP Amoco, Exxon Mobil Corp., Unocal Corp. and other foreign companies have contracts to drill oil in the Caspian Sea. Some companies with contracts in the region have said they favor waiting for more oil reserves to be proven before participating in the Baku-Ceyhan pipeline.

The pipeline construction plan may be completed by year-end, and the pipeline is scheduled to be finished by 2004.

Oil exports from the Caspian Sea region totaled 1.1 million barrels a day in 1997, the U.S. Department of Energy said. That could rise to 5 million barrels a day by 2020, it said.