Azerbaijan, Baku, Aug. 20 / Trend , E.Ismaylov /
Director of the Oil Industry Development Department of the Kazakh Energy and Mineral Resources Ministry, Malik Salimgereyev spoke with Trend in an exclusive interview.
Trend : One of the priorities, carried out by Azerbaijan and Kazakhstan, is the creation of the Kazakhstan Caspian oil transportation system. At what stage is the project now? When the project is expected to be completed?
Malik Salimgereyev: Kazakhstan Caspian transportation system (KCTS) is intended for exporting the increasing volumes of Kazakh oil, which will be produced especially on Kashagan and Tengiz fields, via the Caspian Sea to international markets via the Baku-Tbilisi-Ceyhan oil pipeline and other oil systems located on the territory of the Republic of Azerbaijan.
KCTS will consist of two segments:
1) Eskene-Kurik pipeline on the territory of the Republic of Kazakhstan;
2) Trans-Caspian project (consisting of: a terminal at the Kazakh coast of the Caspian Sea, tankers and vessels, the terminal in the Azerbaijani coast of the Caspian Sea and connecting facilities to the system of Baku-Tbilisi-Ceyhan).
In accordance with the Memorandum of cooperation on Trans-Caspian project dated August 8, 2007 and the Agreement on basic principles of Trans-Caspian project implementation dated November 14, 2008, KazMunayGas JSC and the State Oil Company of Azerbaijan Republic (SOCAR) have agreed to implement the project on equal basis.
With regards to the stage of the project realization, currently the feasibility study for the Eskene-Kuryk pipeline is being finalized. Feasibility study on Trans-Caspian system will be developed jointly with SOCAR in accordance with the terms of the Agreement on basic principles of Trans-Caspian project implementation. The preparation of a feasibility study is expected to commence in the second half of 2009.
Q: Kazakhstan annually increases oil production on its territory. Is it possible to expect an increase in transportation of Kazakh oil via Azerbaijan and what routes are most perspective in this process?
A: In 2008, Kazakh oil from Aktau was transported in the following directions: Makhachkala - 4.5 million tons of oil per year, Baku - 2.7 million tons, Neka - 1.7 million tons. After the establishment of the Kazakhstan Caspian transport system in the future, potential volumes in the direction of Baku could reach from 20 to 50 million tons per year or more.
In connection with the production growth on Azerbaijani fields of Azeri-Chirag-Guneshli (ACG), the available capacity for Kazakh oil in Baku-Tbilisi-Ceyhan pipeline may be not enough.
Due to it, Kazakhstan is interested in using the existing export infrastructure, it necessary, participating in the expansion and creation of new export capacities in the territory of the Azerbaijan Republic.
Q: Does Kazakhstan consider the possibility of transporting its oil via the route of Baku-Supsa and Baku-Novorossiysk, and under what conditions is it possible to realize these projects?
A: Kazakhstan is interested in using alternative routes after Baku [beginning in Baku], in particular the Baku-Supsa oil pipeline, currently owned by the Azerbaijan International Operating Company (AIOC), which develops ACG in the Azerbaijani sector of the Caspian Sea. The capacity of the pipeline is currently 7.2 million tons per year.
Thus, a necessary condition for the transportation of Kazakh oil through the Baku-Supsa will be the consent of the AIOC, as well as the harmonization of mutually beneficial commercial terms of transportation of Kazakh oil via this pipeline.
Due to the lack of bank quality and unattractiveness for shippers of light oil, Kazakhstan is not interested in transporting its oil through the Baku-Novorossiysk pipeline.
Q: During the existence of the Soviet Union, Kazakhstan was one of the key importers of oil and petrochemical equipment, manufactured in Azerbaijan. How is Kazakhstan interested in purchasing this equipment currently?
A: Oil and gas equipment, produced by Azerbaijani companies, is widely known throughout the post-Soviet territory, and established itself as a reliable and quality equipment.
For many years, mainly lifting equipment of Azerbaijani production, such as lifting devices Azinmash-37, were operated on the fields of the Republic of Kazakhstan.
However, after KazMunayGas JSC started the Program on development of new types of oil and gas equipment in the Republic of Kazakhstan in 1998, Kazakh machine-building companies involved in project implementation began to actively master the production of various types of oil and gas equipment, and currently they have mastered producing more than 350 titles.
Thus, Kazakhstan started to develop a new segment of machine-building complex, such as oil and gas machine-building, which allowed avoiding dependence on imported equipment, including lifting units.
At present, Petropavlov Heavy Machinery Plant produces and supplies to the oil industry of Kazakhstan a wide range of special equipment and drilling equipment, including lifting devices of varying load, such as APRS-40, TAP-40, LAR 50, LAR -60, LAR-80, as well as mobile drilling rigs with load capacity of 125 tons.
Thus, currently the oil companies have the opportunity to buy many kinds of oil and gas equipment from the Kazakh producers.
Upon task of the President of Kazakhstan Nursultan Nazarbayev on the need to increase Kazakhstan's content in the procurement of goods and services, purposeful work is carried out to increase the share of Kazakhstan's goods and services in the total amount of purchases and refuse importing products, analogues of which are produced in Kazakhstan.
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