On 26 March, Kazakhstan's Parliament approved the bill on ratification of the agreement with Azerbaijan on support and assistance to transportation of oil from Kazakhstan via the Caspian Sea and Azerbaijan to the international markets through the Baku-Tbilisi-Ceyhan (BTC) system. The bill will be submitted to the Kazakhstan Parliament's Senate for consideration. Thus, one more step was made in connecting Kazakhstan to the BTC.
The issue of connecting Kazakhstan to the BTC has been on the agenda for long. It should be mentioned that an agreement was signed on 16 June 2006 regarding transportation of the Kazakh oil via BTC, agreement on strategic oil and gas co-operation between the two countries and Memorandum on joint realization of the trans-Caspian project. However, Kazakhstan's wish to worsen Russia's mood delays this issue for years.
As previous, Russia wants to transport its Kazakh oil via its territory and does not hide its dissatisfaction with Kazakhstan's consent to join the BTC. Currently Kazakhstan transports its oil to the west via Caspian Pipeline Consortium and Russian Port of Novorossiysk, as well as system of Transneft.
Kazakh Vice Minister Lazzat Kiinov said that the multi-direction hydrocarbon transportation policy envisages creation of new export directions. "The plans on development of hydrocarbons in Kazakhstan profoundly impact on formation of the country's pipeline strategy. The foundation of new transport system was laid which will enable preservation of Kazakhstan's oil quality and linking the Caspian shore of Kazakhstan and Azerbaijan," Kiinov said.
Azerbaijan is more interested in Kazakhstan's joining the BTC. The oil being produced in Azerbaijani fields is not sufficient to ensure profitability of the pipeline and therefore, it is very important for its owners - for the USA - to ensure Kazakhstan's participation in pipeline's activity.
Establishing transport system through Azerbaijani pipeline will enable Kazakhstan to, firstly, ensure transportation of its Kashagan oil to the world market, maintaining its quality. Secondly Kazakhstan will be able to transport its growing oil in unlimited volumes. For instance, in 2004 Kazakhstan produced 60mln tons of oil, but now this figure equals 70mln tons and in 2010 will make up 100mln tons. Formerly the President of Kazakhstan, Nursultan Nazarbayev, stated that if Russia wants to transport Kazakh oil via its territory, it should increase the carrying capacity of its pipelines.
The above-mentioned Memorandum envisages creation of the system, which will enable transportation of the Kashagan oil to the world markets. The Trans-Caspian transport system will enable transportation of 5mln tons of oil per year at the initial stage, and then 38mln tons of oil per year. Presently, the Kazakhstan Caspian Transportation System, which is intended for export of increasing volumes of Kazakhstan's oil from the Kashagan and Tangiz fields via the Caspian Sea to the international markets through the East-West corridor at the Aktau-Baku-Tbilisi-Ceyhan route, is being established.