No progress expected in Kazakhstan’s Caspian oil transportation system

No progress expected in Kazakhstan’s Caspian oil transportation system

Baku, Azerbaijan, Oct. 22

By Elena Kosolapova - Trend:

Kazakhstan doesn't expect progress in realization of the project for creation of the Kazakhstan Caspian Transportation System due to searches for oil transportation route alternatives to the Russian route, Kazakh Energy Ministry told Trend Oct. 22.

The ministry said the further schedule of the KCTS project is to be synchronized with the schedule of the second phase of Kashagan field's development, which is still to be specified.

"Due to the postponement of the second phase of the Kashagan field's development it was decided to suspend the Kazakhstan Caspian Transportation System project," according to the ministry.

The Energy Ministry earlier said that due to the Western sanctions on Russia, Kazakhstan is eyeing other oil export routes that will be an alternative to the Russian one, including the possibility of transporting oil to Azerbaijan through the Aktau sea port and the Caspian Sea.

"Given the current situation, one can assume that the anti-Russian sanctions will not block oil and gas deliveries from Russia to the EU, including Kazakhstan's oil through the Russian pipelines. However, the diversification of oil exports is being studied," the ministry told the News-Kazakhstan Agency.

The ministry said that currently the transit through Russia is the main route for Kazakhstan among all the other oil export routes.

In particular, the pipeline system of the Transneft JSC and the pipeline of the Caspian Pipeline Consortium are the traditional routes for transportation of Kazakhstan's oil.

The KCTS is to provide Kazakh oil exports to international markets mainly from the Kashagan field (second and third phases) across the Caspian Sea, via the Baku-Tbilisi-Ceyhan oil pipeline and other oil transportation systems in Azerbaijan, as well as in other transit countries.

The KCTS is assumed to include the Eskene-Kuryk oil pipeline running to the Kuryk oil terminal on the Kazakh coast of the Caspian Sea, as well as an oil terminal on the Kazakh coast, tankers, vessels, an oil terminal on the Azerbaijani coast, and the linking facilities up to the Baku Tbilisi-Ceyhan pipeline.

The Oil and Gas Minister of Kazakhstan Uzakbai Karabalin earlier told Trend that the need for the KCTS project will occur no earlier than 2020.

The production at the Kashagan field started Sept. 2013, but in October, it was ceased after a gas leak in one of the main pipelines.

The analysis conducted over several months revealed numerous micro-cracks on the pipeline that appeared due to the impact of the associated gas with high sulfur content to the metal.

The project's operator, the North Caspian Operating Co. (NCOC) confirmed the need for a complete replacement of the gas and oil pipelines, which have a total length of about 200 kilometers.

The government said the replacement of pipes will take at least two years.

Earlier, the Deputy Energy Minister of Kazakhstan Magzum Mirzagaliyev said the production at the Kashagan is expected to resume in the second half of 2016.

Edited by CN

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