Export route for Kazakh energy still unresolved

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KAZAKHSTAN — Speaking in Astana on August 27, U.S. State Department Special Envoy for Eurasian Energy Richard Morningstar pledged Washington's full support for Kazakhstan's plans to build the Kazakhstan-Caspian Transportation System (KCTS). "We see this as a sensible project, and are ready to give our full political backing to it," Morningstar stated.

The KCTS project envisions a new transportation system to pump oil from the Tenghiz and Kashagan fields to Baku, Azerbaijan. The KCTS project also includes the Trans-Caspian System, a network of oil terminals on the Kazakh and Azeri shores of the Caspian Sea, a fleet of oil tankers, and infrastructure to connect the system to the Baku-Tibilisi-Ceyhan (BTC) pipeline.

In June 2006, Kazakhstan agreed to join the BTC pipeline project, and in 2007, Kazakhstan's national oil company KazMunayGaz (KMG) signed a memorandum of agreement to construct the KCTS.

During its initial phase, KCTS will start transporting approximately 25 million tonnes of oil annually and eventually increase that volume to 38 million.

The leaders of Azerbaijan, Kazakhstan, Russia and Turkmenistan are expected to convene in Aktau between September 11 and 13 to revisit the thorny issues of sharing rights to the Caspian seabed. "The summit will be an informal gathering, with the agenda set by the presidents themselves. Energy cooperation in general is also likely to be on table for discussion," said Kazakh ambassador to Azerbaijan Serik Primbetov.

Moscow is widely expected to return to the idea of creating the Caspian Economic Cooperation Organisation (CECO), which is regarded as a hindrance to plans of bypassing Russian territory entirely to export oil to Europe.

Moscow has expressed opposition to the Nabucco project and other alternate transportation routes for Central Asian hydrocarbon exports to Europe. Instead, it has approached Kazakhstan and Turkmenistan with a proposal to build a pipeline along the Caspian shore to Russian territory and from there, to European consumers. This would preserve Moscow's position as the main energy supplier to Europe, a role that it has shrewdly exploited to expand its political influence in the region.

[KazTAG.kz, Zonakz.net, OilRu.com, Government.kz]