be based on the Island.

The Caspian Pipeline Consortium will operate as a limited liability company incorporated in Bermuda.

It was established to transport oil from the landlocked Caspian region to world markets.

Oman Oil Company, which will arrange all financing for the pipeline, will also be incorporated in Bermuda.

By signing an agreement in Bermuda, Russia joined Oman and Kazakhstan as partners in the project. Formal ratification is still pending from the new Government of Azerbaijan as to whether it will fulfil its undertaking to the scheme.

Deputy Chairman of the Government of the Russian Federation Mr. Victor S.

Chernomyrd, who came to Bermuda to sign the deal, said: "The coming together of the Russian Federation and the other partners in the pipeline consortium offers great promise for further co-operation in a variety of fields.

"This is also a sound business venture that will produce future profits for our country.

"This co-operative effort will bring together the skills, manpower and resources of the petroleum industries of each member country, and we will all benefit.'' Also participating in the Bermuda ceremony were Mr. Kadyr Baikenov, Kazakhstan's Deputy Prime Minister, and His Excellency Said Bin Ahmed Al Shanfari, Minister of Petroleum and Minerals of the Sultanate of Oman.

Bermuda's Premier the Hon. Sir John Swan and Bank of Bermuda president Mr.

Donald Lines have agreed to become directors of CPC.

His Excellency Said Bin Ahmed Al Shanfari said: "Russia is a nation of major importance, so its membership in the Caspian Pipeline Consortium is especially significant.

"Russia provides a vital link to the Black Sea, from which oil can be shipped economically to European markets.

"Of the eight possible routes identified by the consortium, the route through Russia via Grozny to the port of Novorossysk on the Black Sea is the most economically attractive and politically-stable option.

"Russia will also be contributing its extensive experience in constructing and operating oil pipelines and crude oil loading facilities.'' The consortium was established on June 17 with the signing of an agreement by Oman and Kazakhstan in Muscat, Oman, which was attended by Mr. John Deuss, the Bermuda-based businessman who runs OOC for the Sultanate of Oman.

The projected cost of constructing the pipeline system ranges from between $700 million and $1.5 billion, depending on which route is chosen from several options.

The pipeline will allow the vast oil resources of Kazakhstan and Azerbaijan to be developed and shipped economically to world markets.

This will provide the members of the consortium with revenues to pay for developments to their economies.

In addition to arranging project financing, Bermuda-based OOC, will be project manager and co-ordinator of the pipeline consortium.