The message from the Minister of Energy of Kazakhstan that Astana is considering alternative directions for transporting tens of millions of tons of oil caused a lot of noise. However, is this really so?
“The supply of Kazakh oil through the Baku-Tbilisi-Ceyhan (BTC) pipeline in the volume of 1.5 million tons is planned for 2024. The prospects for increasing supply along this route in volumes are being studied. of up to 20 million tons per year.” — said the Minister of Energy in the Majlis of the Parliament of Kazakhstan Almasadam Satkaliev.
He noted that the BTC direction is currently one of the most promising, as there is interest in the development and a systematic increase in the volume of supply from both Kazakhstan and Azerbaijani partners.
“The possibilities of the Baku-Supsa pipeline are being considered. Production capacity is 5 million tons per year, possible supply volumes are up to 3 million tons per year. The use of this route is in the development and discussion stage.” – added the head of the country’s Ministry of Energy.
Almasadam Satkaliev’s statement caused quite a stir, as the announced volumes represented more than a quarter of Kazakhstan’s current exports. While alternative routes now account for just over 2% of Kazakhstan’s exports.
However, does Astana really want to redirect oil transportation from the pipelines passing through the territory of Russia, towards Novorossiysk and Ust-Luga?
Obviously, part of the supply planned through an alternative route involves an increase in production in the country from projects associated with Western companies.
Almasadam Satkaliev said in the same speech in the Majlis of Parliament that this year oil production is forecast at 88.4 million tons and, starting in 2026, at more than 100 million tons.
Tengizchevroil is implementing a future expansion project that will ensure an increase in oil production of 12 million tons per year. In Karachaganak, work on the fifth compressor has been completed and work is underway to commission the sixth compressor for reinjection of raw gas, which will ensure maintenance of the production level at the level of 11 to 12 million tons per anus”. – said the minister.
He explained that the Trans-Caspian international transport route (to Azerbaijan) is necessary given the growth of oil production and the introduction of new marine projects in the medium term.
Last year, 56 million tons of Kazakh oil were supplied to Novorossiysk through the pipelines of the Caspian Pipeline Consortium (CPC). General Director of the PCC Nikolai Gorban He then said that the project has already reached a capacity of 76 million tons, which could be pumped from Kazakhstan.
However, whether the CPC will be loaded to the maximum or whether more will be done towards alternative routes, through Azerbaijan, will obviously not be such an important decision for the Kazakh authorities. And the oil companies, which own most of the production in three megaprojects in the country. Thus, in Tengiz, 75% belongs to the American companies Chevron and ExxonMobil. In Karachaganak, 76.5% is divided between the Italian Eni, the Dutch-British Shell and the American ExxonMobil. And in Kashagan, in turn, American, European and Japanese companies already own more than 90%. At the same time, the share of the national company Kazmunaigas ranges from 8.4% to 20%.
“And we discussed the possibility of increasing the pumping of Kazakh oil through the CPC to the port of Novorossiysk and continuing to send Kazakh oil to world markets. But it is not only Kazakh, many foreign companies work there, that is, from the territory of Kazakhstan, but this product is already international, of an international nature.” – said the president of Russia Vladimir Putin after negotiations with the president of Kazakhstan Kassym-Jomart Tokayev in Astana.
Leading analyst at FNEB and expert at the Russian Government Financial University Igor Yushkov believes that to cope with a significant increase in supply through Azerbaijan, Kazakhstan will have to significantly expand its existing capabilities.
“We need to create additional capacity in the port of Baku to unload tankers and increase the tanker fleet. Kazakhstan has brought new ships to the Caspian Sea, but they will not be able to carry the 20 million tons. In addition, we need large terminal capacities in Kazakhstan and an undersea pipeline. And only after all these operations, within a few years, a system will appear that will indirectly increase the supply.” – says the expert.
In his opinion, in such a situation the question of economic viability arises. The expert gives as an example that the rate for pumping through BTC is much higher than that for transportation through Transneft networks.
“In addition, it is necessary to deliver oil to the port. Transportation to Baku. Delivery will therefore be made along the BTC and again to the tankers. Why do this if you can immediately load it into a pipeline and pump it to Novorossiysk, Ust-Luga or Germany? Now there are no obstacles for Kazakhstan to pass through Russia. Therefore, this is not a completely realistic story.” – adds Igor Yushkov.
