Question: In what stage is the signing of an Azerbaijani-Kazakh intergovernmental agreement on joint oil pumping via the Baku-Tbilisi-Ceyhan main export pipeline?

Answer: Much work has been done with regard to sign an intergovernmental agreement between the two countries and general principles of the Aktau-Baku transport corridor have been defined.

Earlier we supposed to sign the document on 25 May 2005 in a solemn ceremony of commissioning of the BTC pipeline, while for some reasons Kazakhstan was not ready to do it. The Aktau-Baku system requires Azerbaijan and Kazakhstan to offer definite facilities on oil transportation regimes, favorable fiscal terms.

An intergovernmental agreement is concluded to define the rules of the game: to get determined how the Aktau-Baku pipeline will function. If the governments of Azerbaijan and Kazakhstan are interested in efficiency of the Aktau-Baku transport system, they have a right to offer privileged customs, tax and many other terms for the corridor.

After the signing of an intergovernmental agreement another not least important transport condition is created.

It is signed for the establishment of a favorable regime of investing
, enabling the investors to construct terminals, ports, oil pipelines and another infrastructure.

Q: How soon do you expect the signing of an intergovernmental agreement between Azerbaijan and Kazakhstan?

A: We received a letter from representatives of Kazakhstan and there intentions for continuing talks on the issue.

Kazakh party has sent remarks on some items of the intergovernmental agreement and now they are being analyzed by our specialists.

We are going to study the essence of notes and to meet with counters from Kazakhstan in September. Such meeting will be, more probably, held in Kazakhstan and in Baku.

We want once more consider and discuss the issues concerning the agreement. I guess, we will conclude all work, initial and wait for convenient time for signing of the intergovernmental agreement.

Simultaneously, we will work over future transport agreement.

Q: Is there a necessity for signing of an intergovernmental agreement right now when the development of Kashagan field, which is a guaranteed oil supplier for BTC, is scheduled within several years?

A: It is necessary to sign an intergovernmental agreement and as soon as possible a transport agreement for the commencement of work over the Aktau-Baku transport corridor.

A project on the establishment of necessary infrastructure which would be implemented in the territory of Kazakhstan, is estimated to some $3bn.

The sum includes the construction of a terminal, port infrastructure, and 5 oil tankers of total 125,000 tons displacement. Investors will not appear until the agreements are signed and the rules of the game are defined.

It should be noted that today there are potential investors in the system вЂ" they are several participants in the Kazakh project of Kashagan field. However, the investors should know the rules of the game and their legal basis to establish a consortium, to ensure financing, and to define participation share, and as sooner the agreement is signed as sooner the real work will start.

Q: We have information that French company Total wants to establish a sea terminal n Azerbaijan under the Aktau-Baku system. Could the company start its work without having the intergovernmental and transport agreements?

A: Total is eager to establish a transport corridor, which would work on private rules. The corridor is designed for long-term operation (approximately 50-60 years), and it will constantly develop and get expanded along with oil production in the Caspian region.

Total, certainly, can start work even today, while the company is unwilling to set up such a game without having necessary agreements signed between the two countries The company wants to receive such terms which would guarantee oil transportation operations within a long time.

The investors should be sure that the rules of the game will remain unchanged, as this is a huge risk. Multi-billion investments will be required for the implementation of the project.

Q: There are terminals in Azerbaijan and they function successfully. How much necessary is the construction of a new terminal?

A: In Azerbaijan we can expand the existing infrastructure and establish a new special one the oil transportation via the Aktau-Baku corridor. Most depends on investors.

It depends on weather the investors use the existing capacities in Azerbaijan or build different terminals like Total company, offer to do it near the Pirsaat peninsula.

It’s quote another matter that the establishment of a new infrastructure is of acute importance for Kazakhstan. The Aktau port will carry out only the existing deliveries.

Here it is dealt with a new oil to be lifted Kashagan field, which means 25 million tons of oil a year. Kazakhstan should be more interested in rapid coordination and signing of documents. It will enable to start formation of an investor group for the development of infrastructure.

Q: The discharge capacity of the BTC pipeline is 50 million tons of oil a year and the AIOC will produce crude in the same volume from the Azeri-Chirag-Gunashli fields.

How will be oil pumping via the pipeline set if Kazakhstan will supply 25 million tons of oil more a year. Is it possible to expand the BTC to such volumes?

A: The shareholders in the project on the development of Kashagan field are eager to produce 25 million tons of oil a year by 2010. We will not have free capacity in the BTC by that time, as oil to be produced from the Azeri-Chirag-Gunashli field will fulfill entire discharge capacity of the pipeline.

As of current forecasts 1.2 million barrels of oil will be produced from the Azeri-Chirag-Gunashli fields, but not 1 million barrels of oil a day. The BTC can be extended to pumping 1.8 million barrels of oil a day.

However, we should carry out calculations on commercial profit of such expansion. As of preliminary forecasts, $1bn is required for the expansion of the discharge capacity of the BTC by 80%.

The most important for us today is to conclude an agreement with oil producers and undertake an obligation for crude deliveries, after which it would be possible to design a program on expansion of the BTC pipeline. If it costs $1bn, we will think weather it is worth to carry out by ourselves.

Basically, who want to pump oil let him to finance it, while we will expand the pipeline. This excess discharge capacity will be their with the same tariffs.

Q: Is there a BTC oil quality bank developed?

When oil pumping starts from Kazakhstan, the crude will get mixed with the high quality Azerbaijani oil Azeri Light.

A: We have a concept on Quality Bank. The buyers pay good money for barrel of Azeri Light. Thank to BP company this oil brand has become popular throughout the world.

Until the BTC is fulfilled with oil produced from the Azeri-Chirag-Gunashli fields, Azeri Light will preserve its quality in the Turkish port Ceyhan, while after mixture other law quality oil the mixture will be more probably sold under the title of �BTC Blend’ and cost cheaper than Azeri Light.

The essence of the Quality Bank is not to prevent the loss of the owners of higher quality oil during the mixing with low quality crude. Producers of good oil will receive compensation for loss in quality.

There is a concept on Quality Bank and the SOCAR is working over it. We know how the oil added in the BTC affects on the quality of exit product in Ceyhan.

Georgia begins construction of Namakhvani HPP cascade
Georgia begins construction of Namakhvani HPP cascade
Turkmenistan develops packers to increase oil field productivity
Turkmenistan develops packers to increase oil field productivity
Wind power plant construction underway in Kazakhstan's Zhambyl
Wind power plant construction underway in Kazakhstan's Zhambyl
Loading Bars
FAO, Azerbaijan to develop new program
Kyrgyzstan reports 38 new COVID - 19 cases, 1974 in total
6.2-magnitude quake hits Kazakhstan -- local department
Bolsonaro threatens to withdraw Brazil from WHO
Small plane crash in U.S. state of Georgia kills 5
S. Korea reports 51 new virus cases, most in 8 days
Chinese mainland reports no new domestically transmitted COVID-19 cases
Chile reports 122,499 COVID-19 cases with 1,448 deaths
Head of Al-Qaida in Islamic Maghreb killed in Mali by French forces: minister
Street near White House renamed ‘Black Lives Matter Plaza’ — mayor
58 more coronavirus patients die in Moscow in past day — crisis center
Some 41,500 National Guard officers on duty in US amid protests
WHO recommends wider use of face masks to curb COVID-19
Facebook says it found no foreign interference targeting U.S. protests
Trudeau takes a knee at anti-racism protest on Parliament Hill
Trump orders 9,500 US troops to leave Germany
Finland's finance minister steps down over training payments
5.2-magnitude quake jolts eastern Turkey
EU countries agree on coordinated, non-discriminatory lifting of travel ban
Turkey: Daily coronavirus recoveries up with over 1,600
UK COVID-19 deaths top 40,000 as another 357 patients die
ADB eyeing agreement signing on road reconstruction in Kazakhstan
Azerbaijan discloses number of coronavirus tests
Italy's COVID-19 death toll up 85 to 33,774
Tourists from Israel may be among first visitors to Georgia
Agent bank of two more liquidated banks chosen in Azerbaijan
Azerbaijan plans to increase Virginia tobacco production
Central Bank of Iran seeks to unfreeze foreign currency sources abroad
Azerbaijan Wine Producers & Exporters Association eyes new markets for export
Kazakhstan's Shymkent to oversee implementation of various agro-industrial projects
Azerbaijan’s Technol plant talks about production plans
Georgia begins construction of Namakhvani HPP cascade
Azerbaijan’s Elektrogas company testing latest models of heating equipment
Industrial parks to appear in Kazakhstan's Almaty
Agrarian Credit & Development Agency talks subsidies issued to Azerbaijani farmers
Turkmenistan develops packers to increase oil field productivity
Construction of Georgian Kutaisi bypass road nearing completion
Embassy: Romania, Georgia enjoy excellent relations
More than half of financial irregularities in Azerbaijan fall on accounting and reporting
Wind power plant construction underway in Kazakhstan's Zhambyl
Azerbaijan extends project on supporting women's entrepreneurship
Polish company installing new systems at Kutaisi int'l airport in Georgia
Azerbaijan eyes exporting textile products to Russia, Arab countries
One more professional participant registered in Azerbaijan's insurance market
Uzbek United Processing Center to improve e-business environment in country
Georgia, Poland discuss resumption of air traffic
Federal Ministry: Germany seeks to further expand its relations with Azerbaijan
Azerbaijani association talks planned volume of hazelnut export
Users of fixed internet doubles in Georgia
Global Environment Facility supports environmental project of Uzbekistan
Azerbaijan detects 338 new COVID-19 cases
WeWork Global to invest $100 million in India business
Azerbaijani Tax Service comments on changes to Tax Code
TAP project’s schedule remains unchanged
Canada gains surprise 289,600 jobs in May, jobless rate hits record
Georgia to open skies to international flights
Turkmenistans Turkmenstandartlary extends tender to buy lab equipment
144 Azerbaijani citizens return from Ankara to Baku via Azerbaijan Airlines' flight (PHOTO)
Turkmenistan's Kaakhkinsky district expands areas for vegetable, fruit crops
Solar plant capacity to be increased in Kazakhstan's Karaganda
Kazakh FlyArystan suspends flights to regional center of West Kazakhstan
Uzbekistan sells state shares in wine cluster of Samarkand region
Georgia discloses amount of funds spent on quarantine space
Uzbekistan may lock co-op with Israeli geotechnical engineering company
Review of microfinance organizations' ratings in Georgia
Azerbaijan’s AccessBank ended 2019 with profit
Germany strengthens cooperation with Uzbekistan
Volume of fuel oil shipment via Turkish ports from Jan. through Apr. 2020 announced
Azerbaijani AccessBank’s liabilities decrease
Uzbekistan to upgrade infrastructure of Fergana region's district
Volume of Turkish mining industry products export declines
Azerbaijan's ministry talks postal services work during quarantine
No progress in latest round of EU-Brexit talks
LVMH backs down on renegotiating Tiffany deal
Azerbaijani MFA: Armenia may face severe consequences of its policy
Azerbaijani Energy Minister to attend OPEC+ Ministerial Meeting
Turnover of electric power surges in Azerbaijan
Azerbaijan's textile factory discloses knitwear production capabilities
Spain to open to foreign tourism from July 1
Cargo shipment volume from Ukraine via Turkish ports announced
Google Chrome's share in Azerbaijan's browser market grows
Nine insurance companies’ claims shrink in Azerbaijan
Turkmenistan, Russia discuss co-op within int'l organizations
Turkmenistan assesses environment, following 'day without cars'
France's import of grain, legumes from Turkey down
Coal railway cargo transportation up in Kazakhstan
Kazakhstan's AIFC to bring more revenue to state budget by project co-funding
Jewelry export from Turkey to foreign markets downgrades
South Korean Sejin G&E to bring gas-based power production to Uzbekistan
Turkmenistan's Health Ministry to buy medicines via tender
Uzbek-Chinese JV opens tender for procurement of mobile lifting machinery
British luxury carmaker Bentley to cut quarter of workforce
Presidents of Georgia, Albania may open direct flights
Canada interested in cooperation with Uzbekistan
WoodMac expects significant increase in 2021 oil demand
Azerbaijani parliament approves bill on 2019 budget fulfillment in first reading
Turkmenistan strives for saving Caspian Sea resources during COVID-19
Kazakhstan's KAZ Minerals ups funding for copper project in Russia
Volume of jet fuel transshipment through Turkish ports announced
Azerbaijan’s Elektrogas LLC talks manufacturing gas-fired water heaters
All news