Turkey and Greece Sunday opened the Euro 300 million ($440 million)
Turkey-Greece Natural Gas Pipeline, giving Caspian gas direct access to the
European Union market for the first time.

Greek Prime Minister Costas Karamanlis, according to Turkey's state-owned
Anatolian News Agency, told the opening ceremony at the Evros River border
crossing between the two countries that the event marked the completion of a
project of historic significance.

The Greek news agency ANA-MPA said Turkish Prime Minister Recep Tayyip
Erdogan described the pipeline as a "silk road for energy" because it would
bringing the hydrocarbon riches of Central Asia to European markets.

The 285-km (180-mile) line from Karacabey in Turkey to Komotini in
Greece, which will eventually have a 12 bcm/y capacity, is intended to serve
as the first part of a Turkey-Greece-Italy Interconnector.

Initially, some 750 million cubic meters a year of Azerbaijani gas will
be exported to Greece but this is intended to grow in steps to 3 Bcm/yr. The
Italy connection, on which construction is expected to start next year, will
ensure the delivery of some 8.8 Bcm/yr of gas across the Adriatic.

The importance of the pipeline was underlined by the guest list. The
Anatolian agency reported that Azerbaijani President Ilham Aliev, US Energy
Secretary Samuel Bodman and Georgian Energy Minister Alexander Khetaguri were
present at the opening ceremony.

Responding to concerns about the pace of Azerbaijani gas development,
Aliev was quoted as saying that from now on Azerbaijan would meet both its own
energy needs and, via the new pipeline, serve as a supplier for its partners'
energy needs with this project.

Azerbaijani gas reaches Turkey through the recently opened South Caucasus
pipeline across Georgia, and then transits the Turkish system to Karacabey
before entering Greece.

Azerbaijan is currently negotiating with Turkey over arrangements for its
gas exports. Turkey is understood to be seeking to introduce what it calls a
"transit plus" formula whereby it will buy the gas from Azerbaijan itself and
then re-sell it to customers further afield at whatever mark-up it feels it
can secure.

Azerbaijan is seeking direct access to markets beyond Turkey, with
transit through Turkey governed by a regulated transit fee system.

The line has received strong backing from the European Union which
regards it as one of the two main pillars of its gas supply diversification
strategy in southern Europe. The other is the planned 30-Bcm/yr, Eur5 billion
Nabucco pipeline from Turkey to Austria, via Bulgaria, Romania and Hungary.