With annual oil volumes from Kashagan and Tengiz fields projected to reach 12-13 and 39-40 million tons, respectively, within the following three years, Kazakhstan has started seeking viable export routes for oil and gas transit to the world markets. Except for Kazakhstan-China oil import pipeline and the Tengiz-Novorossiysk pipeline, running up to Russia’s Black Sea coast, Kazakhstan is left with practically no other export alternatives, especially towards the targeted EU markets, given the lack of progress on the implementation of the Trans Caspian Pipeline (TCP) project.
Consequently, Kazakhstan has now turned to its geographically and geopolitically western-oriented neighbor, Azerbaijan, in search of the key to diversification of transit and export corridors for the transportation of its oil and gas reserves. Technical talks on such a possibility were carried out by the intergovernmental commission on economic cooperation between Azerbaijan and Kazakhstan, held last week in Baku. According to Kazakhstan’s Energy Minister, Kanat Bozumbaev, Azerbaijan could serve as one of the priority export routes currently under consideration.
The two states agreed on the creation of a working group that will be responsible for estimating the viability of a planned LNG facility in Western Kazakhstan, from which gas will be shipped to Azerbaijan and from there on to international destinations. A second working group will separately look into the issue of oil transit.
LNG terminals for Caspian gas supplies constitute a long been pondered topic of discussion due to logistic problems and expensive investments that would be required for their realization. However, the fact that this option is, too, put to the table clearly proves the littoral states’ determination to overcome longstanding obstacles, like the yet unresolved Caspian Sea legal status, that have hindered their energy export prospects to the western markets.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-december-14-2017/#3
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