Kazakhstan revives plans for oil route through Azerbaijan

BAKU. KAZINFORM - Kazakh officials have recently restarted talks on Kazakh Caspian Transportation System (KCTS), online oil and gas "Nefte Compass" magazine has learned.
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This oil transportation scheme was widely discussed between Kazakhstan and Azerbaijan in 2007 - 2008.

The KCTS was expected to consist of Eskene-Kuryk oil pipeline in Kazakhstan and Trans-Caspian Oil Transport System, including an oil terminal in Kazakh Kuryk port on the Caspian Sea, tankers and other vessels, an oil terminal on the Azerbaijani coast of the Caspian Sea and facilities connecting it to the Baku-Tbilisi-Ceyhan pipeline, Trend.az reports.

Further, oil would be transported to international markets through the Baku-Tbilisi-Ceyhan oil pipeline and/or other oil transportation systems located in the territory of Azerbaijan and other transit countries.

But the project was later shelved because of uncertainties over Kashagan oil field production and the expansion of Tengiz field.

Kazakhstan's current export capacities are enough to accommodate the country's current output, industry players say.

"However, it is clear that the country would need extra capacities and KCTS is back on the agenda due to rising optimism over future crude exports after last year's two milestones -- production start-up at the Kashagan field and the final investment decision to move forward with a $37 billion expansion of Tengiz," Nefte Compass said.

Kashagan located in the north of the Caspian Sea is the biggest oil field opened in the last 40 years. Its recoverable oil reserves are assessed at 9-13 billion barrels. Oil production at Kashagan was launched in autumn 2016, and Kazakhstan plans to produce 8.9 million tons of oil and 5.6 million tons of gas at this field in 2017 with gradual increase in output in subsequent years.

Tengiz field gives about 30 percent of Kazakhstan output. In June 2016 the project partners approved the final investment decision for the Future Growth Project at the field. The project is expected to increase Tengiz crude oil production capacity by 12 million tons per year to about 39 million tons.

According to the BP Statistical Review of World Energy, Kazakhstan's proven oil reserves as of early 2016 stood at 30 billion barrels.

According to Kazakh Statistics Committee, Kazakhstan's oil and gas condensate production hit 78.04 million tons in 2016, which is 1.8 percent less to compared to 2015.

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