The first stage of a contentious oil pipeline running from the Caspian sea through Georgia to the Mediterranean has been opened. Mark Tran explains

Where is the pipeline?

Once completed, the Baku-Tbilisi-Ceyhan (BTC) pipeline will run 1,100 miles, from the Sangachal terminal near Baku, the capital of Azerbaijan, through Georgia and to the Turkish Mediterranean port of Ceyhan.

How much oil will it carry?

The pipeline will carry 1m barrels a day from the Caspian sea, which contains the world's third-largest oil and gas reserves. A total of 10m barrels of crude oil is required to fill it. Estimates put reserves in the region at 33bn barrels, compared with around 715bn barrels in the Persian Gulf. Caspian production amounts to around 2m barrels a day - roughly the same as Iraq.

How much did it cost?

The $3.2bn (£1.74bn) pipeline, the largest private construction project in the world, is part of a $20bn series of energy developments to produce and transport oil and gas from the landlocked Caspian. The British oil giant BP is the leading company in the consortium, which also includes the US firms Unocal and ConocoPhillips.

Why is the pipeline significant?

The US favoured the pipeline on the grounds that it would lessen western dependence on Middle East oil and Russian pipelines, as well as well as avoiding Iran. While the pipeline crosses areas plagued by separatist conflicts, the countries involved hope it will bring economic benefits and enhance political stability.

How much Caspian Sea oil goes through Russia?

Most Caspian oil exports currently go through Russian pipelines to the Black Sea port of Novorossiisk, where the oil is loaded onto tankers that squeeze through the very busy Bosporus. Russian officials tried to persuade Azerbaijan not to sign on to the project.

What regional impact will the pipeline have?

Azerbaijan is banking on it to raise its profile in the world and to bolster international support for Baku in its dispute with Armenia over the Nagorno-Karabakh enclave, which was taken over by ethnic Armenian separatists more than a decade ago. The conflict continues to simmer, undermining the region's security. Meanwhile, Georgia - which has troubled relations with Russia - sees the pipeline as a way of lessening its dependence on Russian energy supplies.

Who stands to benefit economically?

Azerbaijan, Georgia and Turkey stand to earn substantial revenue through transit fees and royalties. BP says the major oil and gas fields and pipelines will provide revenues of more than $150bn to Azerbaijan, Georgia and Turkey between 2005 and 2024. The European Bank for Reconstruction and Development has forecast that Azerbaijan's economy will grow by more than one fifth this year, while oil revenues will swell government coffers by $50bn. Turkey says the pipeline could be the "Silk Road of the 21st century", and BP describes the Caspian as one of its major new profit centres.

Is anyone opposed to the project?

Environmental and human rights groups have criticised the scheme. The Kurdish Human Rights Project and Friends of the Earth, amongst others, are particularly critical of Botas, the nationalised Turkish pipeline company, which is carrying out the construction work in Turkey.

Botas has been accused of offering far less compensation to landowners than promised, and NGOs say there have been cases of landowners being threatened for refusing to accept offers of compensation. They also allege that Ferhat Kaya, a human rights activist, was beaten up and tortured last year as a direct result of his work on cases of abuses related to land expropriation in Turkey.

Is there a terrorist threat?

Because of the separatist conflicts in the region, terrorism cannot be discounted, but the pipeline is specifically designed to thwart such attacks. It is completely buried along its path through Azerbaijan, Georgia and Turkey. The pipeline passes within a few miles of Nagorno-Karabakh, and critics have suggested it could be vulnerable to terrorist attacks at various points. The James Bond film The World is Not Enough featured a terrorist threat against the pipeline.

What about environmental concerns?

Some engineers who worked on the project claim there were insufficient checks on the risk of the pipe buckling in earthquake zones. Another concern cited by the Baku Ceyhan Campaign, a group opposing the pipeline, is the effectiveness of the coating designed to protect the pipe from corrosion. Any leakage in Georgia could affect the mineral water aquifer at Borjorni national park. Borjorni water is a major Georgian export.

What does BP say?

BP says it has set out to "raise the bar" and establish a new international benchmark in human rights and environmental standards on the project. The new benchmark, it says, extends to such diverse areas as leak detection, land acquisition, biodiversity and community investment. The company also says the pipeline is to be buried for its entire route, meaning nobody would be permanently displaced from their home.