BAKU, Azerbaijan, February 19. The State Oil Company of Azerbaijan (SOCAR) is assessing the feasibility of transporting approximately 2.2 million tons of Kazakh oil per year through the Baku-Tbilisi-Ceyhan (BTC) pipeline, informed sources exclusively told Trend.
"SOCAR is using the following model in commercial negotiations: whether the additional transit revenue from the additional Kazakh oil through BTC can offset the losses from the deterioration in quality, as Kazakh oil has a higher sulfur content than the BTC Blend (the basis of this oil mix through BTC is the high-quality Azeri Light oil). Negotiations on the volume of 2.2 million tons are ongoing, but the outcome will depend on commercial calculations," noted one of the sources.
Another source mentioned that discussions regarding the 2.2 million tons are taking place between SOCAR and KazMunayGas (KMG), considering all aspects of commercial attractiveness for both parties.
"Work is underway to determine whether the two companies will reach agreements on commercial deliveries. Interstate agreements usually have a framework nature. The negotiation process continues, weighing the pros and cons," added the source.
To note, at the end of last week, the Minister of Energy of Kazakhstan Almassadam Satkaliyev said that as part of the development of the Trans-Caspian International Transport Route (TITR, or Middle Corridor), KMG and SOCAR expressed mutual interest in increasing the volume of transit along the BTC route to 2.2 million tons per year.
Back in 2022, Baku and Astana agreed on 1.5 million tons per year and last year this agreement was realized almost fully (in 2023, Kazakhstan transported 1.39 million tons of oil through the Baku-Tbilisi-Ceyhan (BTC) oil pipeline as the supplies began in the spring instead of winter.
Satkaliyev also noted that "Kazakhstan is analyzing the possibility of using the Baku-Supsa pipeline, which has a throughput capacity of five million tons per year".
The same information was confirmed by SOCAR.
Azerbaijan hasn't used the Baku-Supsa route for more than 1.5 years, considering it unprofitable for exporting its high-quality oil in the current geopolitical situation in the region.
The Caspian Pipeline Consortium (CPC) has been remaining the main route for Kazakhstan's oil exports for many years (in 2023, 56.6 million tons of oil were transported through it out of a total production of almost 90 million tons). Taking into account the planned increase in production at Tengiz and Kashagan, exports from the Kazakh section can be increased to 72.5 million tons per year.
Kazakh oil is also transported to the EU via the Druzhba oil pipeline. CPC and Druzhba run through the territory of Russia, and Kazakhstan has other transit routes on its agenda, including through Baku.