Kazakh oil to flow into Turkey after historic deal
A new energy agreement signed between Azerbaijan and Kazakhstan linking a planned oil pipeline to Azerbaijan"s Baku was ratified by Kazakh President Nursultan Nazarbayev yesterday, marking an opportunity for Turkey to market Caspian Sea oil to the rest of the world.
Under the agreement, Kazakhstan will transport oil through the new Eksene-Kuruk pipeline, to be constructed, and also via tankers, to Baku, the starting point of the Baku-Tbilisi-Ceyhan (BTC) pipeline, which passes through Georgia and terminates in Turkey. Kazakhstan"s KazMunai Gaz and Azerbaijan"s state-owned oil company have been negotiating since 2002 for ways to make possible the integration of Kazakh oil to the BTC.
The agreement was finalized on May 26, when the Kazakh parliament ratified the deal. The agreement entered into force with Nazarbayev's final approval yesterday.
Under the new deal, a new 730-kilometer pipeline running from Kazakhstan's Eskene region to Kuruk will be constructed. Oil will be transported from the Kuruk port to Baku via tanker. Once pumped into the BTC there, Kazakh oil will then go to Ceyhan in Turkey, increasing the amount of oil arriving in Ceyhan to 75 million tons a year -- up 50 percent from the current 50 million.
The BTC, which began operating in 2006, is 1,767 kilometers long, with 443 kilometers of it passing through Azeri land, 248 through Georgia and 1,076 through Turkey. The Eskene-Kuruk-Baku pipeline, expected to be completed in 2013, will have a pumping capacity of 1.6 million barrels a day, compared to the BTC's current capacity (as of May 28) of 1 million barrels per day. The pipeline has been operating for two years.
The BTC is owned by BP, 30.1 percent; Azerbaijan BTC, 25 percent; Chevron, 8.9 percent; Statoil, 8.71 percent; the Turkish Petroleum Corporation (TPAO), 6.53 percent; ENI, 5 percent; Total, 5 percent; Itocuhu, 3.4 percent; INPEX, 2.5 percent; ConocoPhillips, 2.5 percent; and Hess, 2.36 percent. Russia sees the new pipeline as an attempt to weaken its regional influence.