Avoiding Russia, Kazakhstan looks at two new channels for crude oil exports

Seetao 2022-08-13 09:24
  • The Kashagan field in Kazakhstan produces a total of 7.2 million tons of crude oil and 4.4 million cubic meters of oil-associated gas.
  • A Russian regional court on July 6 ordered a 30-day suspension of the Caspian Sea Pipeline Union's oil pipeline activities, citing technical issues related to environmental regulations
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As a landlocked country, two of Kazakhstan's many crude oil export routes pass through areas controlled by Russia. The historical relationship between Russia and Kazakhstan is relatively good, and the leaders of the two countries have frequently interacted recently. Kazakhstan’s crude oil transits through Russia, bringing rich transit benefits to Russia. According to its estimates, it is very unlikely that Russia will cut off Kazakhstan’s transit crude oil. Recently, the Kazakh government is also actively contacting various sales channels to diversify crude oil export channels.

Kazakhstan is expected to sell some of its crude oil through Azerbaijan's oil pipeline from September 2022. Kazakhstan's National Oil Company (KMG) is in discussions with Azerbaijan's state oil company to obtain permission to export 1.5 million tons (about 11 million barrels) of Kazakh crude oil annually through the Azerbaijani pipeline. The pipeline will transport oil to Turkey's Ceyhan port in the Mediterranean.

The contract between Kazakhstan and Azerbaijan is expected to be signed by the end of August, with shipments starting a month later. However, compared with the current flow of 1.3-1.4 million barrels per day in Kazakhstan through the CPC pipeline in the Caspian Sea, the amount of oil to be transported through Azerbaijan is very small. Keywords: engineering news, overseas news

From 2023, Kazakhstan will also be transporting 3.5 million tons of crude oil per year via another pipeline via Azerbaijan to the Georgian Black Sea port of Supsa. Together with the aforementioned flows to Turkey, the total would be just over 100,000 bpd, or 8% of CPC flows.Editor/XingWentao