Azerbaijan, Baku, Sept. 13 / Trend A.Badalova /
The Caspian Sea region has the potential to export oil and natural gas to European, South Asian, and East Asian markets, the U.S. Energy Information Administration (EIA) believes.
"With rising energy prices and growing global demand for oil and natural gas, Caspian region countries are developing several approaches for increasing exports of oil and natural gas. Some countries cooperate and jointly develop oil export capacity, while others focus on attracting enough investment to create their own routes," EIA's report published on its official website said.
According to EIA, Kazakhstan and Azerbaijan have had the most success in developing Caspian oil and natural gas export capacity through the construction of several major pipelines, which have become the main transit routes for Caspian hydrocarbons.
EIA mentioned that the biggest export route to bring oil directly from Caspian fields to European markets is the Baku-Tbilisi-Ceyhan (BTC) pipeline, which was commissioned in 2006.
With growing oil and natural gas production in Kazakhstan and Azerbaijan, the two countries are working to develop new export routes, such as the Kazakhstan-Caspian Transportation System (KCTS), EIA said. KTCS is expected to supply 300,000 barrels per day (bpd) through BTC to global markets, gradually increasing to 800,000 bpd. Foreign investment will fund part of the project, estimated to cost $4 billion.
The main avenue for delivering Caspian oil to East Asian markets is the Kazakhstan-China oil pipeline, built through a joint venture between the China National Petroleum Company (CNPC) and Kazakhstan's KazMunaiGas in 2009, the report said. The pipeline is currently upgrading to accommodate expected oil from the Kashagan oil field.
The Turkmenistan-China gas pipeline, commissioned in 2009, transports up to 39.6 billion cubic meters of natural gas per year from Turkmenistan to China's Xinjiang region. Kazakhstan plans to link this pipeline to its own production sites to export more natural gas to China.
EIA in its report also mentioned Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, which envisages gas supplies to South Asia. "Most recently, however, tensions between Pakistan and India have threatened to stall the project, which a variety of energy companies are interested in funding," the report said.
Caspian oil currently moves through South Asia primarily via Iranian oil swaps: Iran imports oil from Central Asian countries that is sent to refineries in Tehran and Tabriz and then delivers an equivalent amount of oil to potential buyers in the Persian Gulf, bypassing the challenge of getting Central Asian oil to global markets.
According to the EIA's estimations, in 2012 proved and probable reserves within the basins that make up the Caspian Sea and surrounding area amounted to 48 billion barrels of oil and 8.268 trillion cubic meters of natural gas.
EIA estimates that the Caspian Sea region produced an average of 2.6 million barrels per day of oil and lease condensate in 2012, around 3.4 percent of the total world supply. The natural gas production in the Caspian region, according to the EIA's estimations amounted to 79.3 billion cubic meters in 2012.