Volume of Kazakh oil transportation via BTC announced

Oil&Gas Materials 5 December 2013 17:25 (UTC +04:00)
Tengiz oil supplies through the Caucasus corridor, including Baku-Tbilisi-Ceyhan (BTC), resumed in August this year.

Astana, Kazakhstan, Dec.5
By Daniyar Mukhtarov - Trend:

Tengiz oil supplies through the Caucasus corridor, including Baku-Tbilisi-Ceyhan (BTC), resumed in August this year, a source at Kazakhstan's oil and gas market told Trend.

"Tengiz oil supplies through the Caucasus corridor, including BTC, resumed in August this year. We are talking about an agreement for the supply of four million tons of Tengiz oil per year through the territory of Azerbaijan. Nevertheless, the supplies will be distributed as follows: three million tons - through the BTC, one million tons - through the Black Sea ports of Batumi (owned by KazMunaiGas JSC - Trend note) and Kulevi," the source said.

Talking about the reasons for resuming Tengiz oil supplies via BTC, the source stressed that there is not any policy, only economic and pragmatic reasons require the diversification of oil flows.

"There are several reasons for the resumption of Tengiz oil supplies via the Baku-Tbilisi-Ceyhan through the territory of Azerbaijan. First, shareholders of BTC pipeline and Tengizshevroil agreed on the amount of the tariff for pumping oil through the pipeline.

The tariff became less. The current amount of the tariff is a commercial secret. But the parties reached a compromise as a result of a decrease in the tariff for transit," the source said.

The second reason for resuming the transit of oil through Azerbaijan's territory is that the shareholders of Tengizshevroil adopted a decision to resume the supply of Tengiz oil through the South Caucasus in 2013 due to the problems with Russia's railway, according to the source.

"Strategically, it is always important to have a backup variant. In addition, some four million tons accounts for only 13 percent of the total volume of oil produced at Tengiz. Such volumes by no means can be reflected in the total revenue of Tengizshevroil shareholders," the source said.

The major volume of oil produced at Tengiz field will be transported via the Caspian Pipeline Consortium through Russia's territory, according to the source.

The volume of oil production at Tengiz field amounted to 26 million tons in 2012.

"The third reason is that it is important for us to use the port of Aktau, where the project of expansion is being implemented, the port of Batumi in the Black Sea, as well as the vessels belonging to Kazmortransflot," the source added.

Some four million tons of Kazakh oil will be transported through Azerbaijan in 2014, head of the Investment Department of the Azerbaijani Energy Ministry Ramiz Rzayev said earlier.

To date, over 230 million tons of oil has been transported via the Baku-Tbilisi-Ceyhan export pipeline and around 225 million tons of Azerbaijani oil was sent to world markets through the port of Ceyhan, Rzayev said.

The oil pipeline also played an important role in transporting oil from other Caspian Sea countries. To date, about 8.6 million tons of Turkmen oil has been transported through the pipeline, the article said.

"The interest of Kazakh and Russian companies in this issue is on the increase and the evidence is the adoption of a decision on transportation of around four million tons of Kazakh oil through Azerbaijan in 2014," Rzayev said.

The total length of the pipeline BTC is 1768 kilometres of which 443 kilometres goes through Azerbaijan, 249 kilometres through the territory of Georgia and 1076 through the territory of Turkey. Construction of the pipeline started in April 2003 and began flowing with oil on May 18 2005.

Stockholders of BTC Co established on August 2002 are BP (30.1 percent), AzBTC (25 percent), Chevron (8.9 percent), Statoil (8.71 percent), ТРАО (6.53 percent), Eni (5 percent), Total (five percent), Itochu (3.40 percent), Inpex (2.5 percent), ConocoPhillips (2.50 percent) and ONGC (2.36 percent).

Partners in the project for development of Tengiz field at Tengizchevroil LLP include Chevron - 50 percent; KazMunaiGas - 20 percent; ExxonMobil Kazakhstan Ventures Inc.- 25 percent; and LUKArco - 5 percent.