Azerbaijan, Kazakhstan boost effort on trans-Caspian project
The state energy firms of Azerbaijan and Kazakhstan
- SOCAR and KazMunaygas - signed an agreement in Baku on Friday
covering the basic principles of building the trans-Caspian oil
export project.
The deal envisions transporting oil produced in the Central Asian state to Azerbaijan through the Caspian Sea and pumping it into the Baku-Tbilisi-Ceyhan (BTC) pipeline to be sent on to European markets.
Under the agreement, signed by SOCAR president Rovnag Abdullayev and the head of the Kazakh state oil and gas firm KazMunaygas, Kairgeldi Kabildin, 500,000 barrels per day (23 million tons a year) will be transported through the trans-Caspian system at the initial stage, and 750,000 bpd (35m tons a year) in later stages. Further, the figure is to be brought to 1.2m bpd, or 56m tons.
The current annual capacity of the BTC pipeline is 50m tons.
Sauat Mynbayev, Kazakhstan`s Minister of Energy and Mineral Resources, said oil production is predicted to reach 100m tons in his country in 2015, which points to the viability of exporting Kazakh oil through the conduit.
The head of KazMunaygas noted that the agreement envisages establishing a joint venture to develop a feasibility study for the project, which would cover construction and day-to-day operations.
Kabildin said initial estimates placed the cost of the project at some $3 billion. It will be comprised of several segments: creating infrastructure in Kazakhstan; the trans-Caspian segment, which will be financed jointly with Azerbaijan; and creating an infrastructure in Azerbaijan.
"A successful implementation of the trans-Caspian project will allow for creating a reliable system of long-term transportation by tankers through the oil terminals in the two countries and subsequently exporting crude via the BTC pipeline and other oil transport infrastructures," Kabildin said.
As part of the project, a new infrastructure will be built for this purpose on the Kazakh coast of the Caspian Sea. Notably, the Eskene-Kuryk oil pipeline is to be constructed, the Kuryk seaport expanded, and new tankers with a loading capacity of over 60,000 tons purchased for use in transporting crude through the Caspian for further pumping into the BTC in Azerbaijani territory. Kazakhstan will use this as a source for producing oil and gas from its Kashagan offshore field, which is being developed by the international consortium Agip KCO, and another major deposit, Tengiz, which is being tapped by the Tengiz-Chevron joint venture.
The deal envisions transporting oil produced in the Central Asian state to Azerbaijan through the Caspian Sea and pumping it into the Baku-Tbilisi-Ceyhan (BTC) pipeline to be sent on to European markets.
Under the agreement, signed by SOCAR president Rovnag Abdullayev and the head of the Kazakh state oil and gas firm KazMunaygas, Kairgeldi Kabildin, 500,000 barrels per day (23 million tons a year) will be transported through the trans-Caspian system at the initial stage, and 750,000 bpd (35m tons a year) in later stages. Further, the figure is to be brought to 1.2m bpd, or 56m tons.
The current annual capacity of the BTC pipeline is 50m tons.
Sauat Mynbayev, Kazakhstan`s Minister of Energy and Mineral Resources, said oil production is predicted to reach 100m tons in his country in 2015, which points to the viability of exporting Kazakh oil through the conduit.
The head of KazMunaygas noted that the agreement envisages establishing a joint venture to develop a feasibility study for the project, which would cover construction and day-to-day operations.
Kabildin said initial estimates placed the cost of the project at some $3 billion. It will be comprised of several segments: creating infrastructure in Kazakhstan; the trans-Caspian segment, which will be financed jointly with Azerbaijan; and creating an infrastructure in Azerbaijan.
"A successful implementation of the trans-Caspian project will allow for creating a reliable system of long-term transportation by tankers through the oil terminals in the two countries and subsequently exporting crude via the BTC pipeline and other oil transport infrastructures," Kabildin said.
As part of the project, a new infrastructure will be built for this purpose on the Kazakh coast of the Caspian Sea. Notably, the Eskene-Kuryk oil pipeline is to be constructed, the Kuryk seaport expanded, and new tankers with a loading capacity of over 60,000 tons purchased for use in transporting crude through the Caspian for further pumping into the BTC in Azerbaijani territory. Kazakhstan will use this as a source for producing oil and gas from its Kashagan offshore field, which is being developed by the international consortium Agip KCO, and another major deposit, Tengiz, which is being tapped by the Tengiz-Chevron joint venture.
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