Kazakhstan: the choice of pipes
By Seymur Aliyev
Head of Trend Agency's Russian News Service
A sanction war between Russia and the West has long went beyond
these players and touched their partners, which have no direct
relation to the conflict in Ukraine.
These countries are often forced to reconsider their own models of
traditional economic projects and think about new logistics
schemes.
Kazakhstan is considering the oil export options through China and
Iran in case of further sanctions against Russia, the Kazakh
National Economy Ministry told News-Kazakhstan agency.
The oil transportation options through the sea port of Aktau to
Baku and farther - through Azerbaijan to the world markets are
being considered, the ministry said.
The possible oil supplies through Iran are not anything new for the
Caspian region. In a certain sense, this route has already been
tested and it worked. The supplies are made as part of the
SWAP-operations. Thus, Iran gets the Central Asian oil in its
Caspian ports and supplies the obtained volumes in the Persian
Gulf.
The idea is interesting, but there are two issues. First, the oil
is supplied to the traditional market full of offers in the Persian
Gulf. Second, Kazakhstan is concerned about the problematic
relations between Tehran and the West.
As for China, the developing market of this country is ready to
absorb any volumes that Kazakhstan may supply. However, Astana will
be bound with the only market and this does not correspond to the
interests of diversification. At the same time, both Russia and the
West have never intended to push Astana towards Beijing.
Europe is still the most interesting and attractive market for
Kazakhstan. Along with the oil sale through tenders on these
markets, it is necessary to consider such an important component as
Kazakhstan's refining assets in Europe.
At present, Kazakhstan's oil is supplied through Azerbaijan, in
particular through the Baku-Tbilisi-Ceyhan oil pipeline, to the
Mediterranean coast.
There are also opportunities to deliver oil from Kazakhstan to the
Black Sea region via a railway through Azerbaijan. So, the
relevance of the Trans-Caspian direction again increases for the
producers in the east coast of the Caspian Sea.
Russia, Kazakhstan and Belarus today are being actively integrated
and develop their economic cooperation within the Eurasian Economic
Union. However, the sanctions imposed on Russia directly affect the
whole economic space within the union. While Belarus doesn't get
used to the sanctions of the West, Kazakhstan has already started
to look for a way out of the presumed situation.
At the same time, the sanctions may directly or indirectly target
the new economic union which includes a large territory, rich with
hydrocarbons and natural resources, as well as population of 170
million.
The dependence of economy on the energy sector is characteristic
for all post-Soviet countries which have large hydrocarbon
reserves. And this fact makes it important for these countries to
protect their interests in this sphere and create a diversified
supply system against the background of the presumed dramatic fall
in world oil prices as a result of the war of sanctions.
Meanwhile, regardless the supply volume, it is necessary to ensure
the operation of all routes. The bright example for this is
Azerbaijan which has three oil and four gas export pipelines. And
despite the existence of economically and geographically effective
oil export route as Baku-Tbilisi-Ceyhan, the routes for exporting
oil to the Black sea region via pipelines through Georgia and
Russia also continue their operation.
The current situation in Ukraine reemphasizes the importance of
diversifying the energy supply routes, which allow the countries to
maintain their energy security at a high level and pursue
independent energy policy under the conditions of constantly
changing political situation.