Azerbaijan and Kazakhstan plan oil transit cooperation

Azeri state oil company SOCAR and Kazakhstan’s Kazmunaigas are thinking of creating a new company in order to make trans-Caspian oil exports. This information was disseminated on October 5. The Presidents of the two countries, Ilham Aliev and Nursurtan Nazarbaev, have concluded an agreement on conducting a feasibility study of trans-Caspian oil transportation.

This project is not about pipeline construction as it envisages transporting oil by tankers. If well organised 500,000 barrels of oil could be transported daily in this way, 23 million tonnes annually. In the future from 35-56 million tonnes a year could be transported, 750-1,200,000 barrels daily. The Kazakh oil transported by these tankers would go on through the Baku-Tbilisi-Ceyhan pipeline, and this transportation system would presumably start functioning in 2012.

The Presidents have also signed a memorandum of understanding on the construction of the new Baku-Black Sea pipeline. Presumably this new pipeline will be built by KazMunaiGas and SOCAR.

As Georgia is indirectly part of these projects Tbilisi is expressing its utmost satisfaction with these initiatives. However it is strange that Kazakhstan is not intending to use the existing Baku-Supsa pipeline but seeking to construct a new pipeline.