Feasibility study of Trans-Caspian project being developed: Interview with head of SOCAR Kazakhstan Office

Oil&Gas Materials 29 June 2009 14:05 (UTC +04:00)
Feasibility study of Trans-Caspian project being developed: Interview with head of SOCAR Kazakhstan Office

Kazakhstan, Astana, June 27 / Trend , K.Konyrova/

SOCAR representative to Kazakhstan Vurgun Jafarov spoke in an exclusive interview with Trend .

Trend : In what stage is the construction of Trans-Caspian Oil Transport System (TCOPS)?

Vurgun Jafarov: Technical and commercial groups continue the work begun after the signing of the Agreement on Basic Principles of Trans-Caspian System. Specialists from SOCAR, KazMunayGas, Chevron, and G6 (all members of the Kashagan consortium) involved in the project have already conducted a series of meetings in Baku, Astana, London, where a lot of questions discussed were discussed. At this stage, we can say all the issues have been solved and preparation for feasibility study has been completed.

Recently a meeting of first leaders of the two national companies SOCAR and KazMunayGaz was held in Baku. Current state of affairs at this stage was discussed and it was instructed to proceed with the development of feasibility study of the Trans-Caspian project. In short, we are working.

Q: How much will feasibility study cost?

A: The cost of the feasibility study is not known yet. By forming a technical task, we have tried to avoid unnecessary things and to make it optimally concise and specific so that the price proposed for feasibility study was real and accessible to both companies.

But it is obvious that SOCAR and KMG will conduct the feasibility study. To do this, both companies will create a joint venture or consider other options to order a feasibility study. Recently KazMunayGas suggested one option to buy time and we are revising it at the moment.

Q: When the feasibility study will be offered?

A: I think it will take place in coming months, most probably in autumn this year. As you know, the package of the project consists of several TCOPS elements. One of these fragments is the pipeline, which connects Eskene-Kuryk, where there are still ongoing negotiations between the parties concerned.

Q: What other issues will be discussed?

A: The anticipated volume of shippers remains most pressing issue today. Only in this case, the project will be filled with content and will be in demand. Safeguards must be in Tengiz and Kashagan. This is very important point.

In late June - early July this year, KMG, SOCAR and participants on the Kashagan consortium should meet again in London. At this meeting, professionals should discuss the latest technical developments.

Q: What share will SOCAR have in the TCOPS project? There is information that Kazakhstan's share will be 51% ...

A: For the first time, I hear that KMG will have 51% of the TCOPS. Originally, the equality of 50-50 was the main issue. It was always so and nothing has changed.

Q: Do the Kashagan project participants plan to join this project?

A: The participants of the consortium at times put this question and wish to join the project both in a financial plan and as operators. But as I said, authors and executors of this project will be SOCAR and KazMunaiGaz.

Q: And which share can the Kashagan consortium members have?

A: SOCAR's position is unambiguous: In this project we are dealing with KMG and do not want other partners. All sides must be interested in this project. SOCAR's interest is to expand its existing transit corridor. For KMG - this is an alternative to deliver its oil to world markets, and for shippers - this is a ready logistics system. Therefore, we consider the G6, and Chevron, only as shippers.

Q: Which pipeline will be preferable after completion of the TCOPS - Baku-Supsa or Bak-Tbilisi-Ceyhan oil pipeline?

A: The time will show whether the route Baku-Supsa and BTC. Which version would be acceptable - it will depend on the amount of oil to be transported in the first stage. Perhaps, all versions for the corridor will be effective till a new one.

Q: When will the Tengiz oil be transported via the Azerbaijani oil terminal Kulevi in Georgia, and why is this process delayed?

A: It depends on the plans of Chevron, second, on number of tankers that can be used to transport oil through the Caspian Sea. Third, it depends on a bank of oil quality. As to Kulevi terminal, it will be ready to handle oil in the near future, after the completion of some technical work on the channel.