23 Dec 2010 16:35

Kazakhstan plans to begin building Trans-Caspian Oil Transportation System

ISTANBUL. Dec 23 (Interfax) - Kazakhstan will soon start the construction of the Trans-Caspian Oil Transportation System, which would make it possible to deliver Kazakh oil to the Baku-Tbilisi-Ceyhan (BTC) pipeline and further to global markets, Kazakh Prime Minister Karim Masimov said.

"We have also made certain progress in creating a transportation system that will deliver oil to the BTC. It will be completed in the near future," Masimov said at the Economic Cooperation Organization's (ECO) summit in Istanbul on Thursday.

As far as Central Asian states are concerned, "this is a common important project because it enables us to reach Turkey," he said.

"We support this project in every imaginable way," the Kazakh prime minister said.

ECO member states "have common interests in shipping energy resources to consumers on the global market," he said.

"Kazakhstan will comprehensively advocate the safe delivery of energy resources to the world market, primarily to our neighbors. We are committed to the strategy of diversifying export routes," Masimov said.

The Kazakhstan-China oil pipeline, which "links the Caspian region, Kazakhstan and China", started to operate in October 2009, the Kazakh prime minister said.

The Kazakh state-owned oil and gas company KazMunayGas announced earlier that the deadline for the Trans-Caspian Oil Transportation System project, initially set for 2013, would be postponed, naming the possible absence of required oil supplies among the reasons behind this decision.

In January 2007, KazMunayGas, Agip KCO and the joint venture TengizChevroil signed a memorandum of mutual understanding outlining the main principles of cooperation in the project, which envisions the building new oil transport infrastructure on the Kazakh coast of the Caspian Sea, building an Eskene-Kuryk oil pipeline and expanding the Kuryk seaport, from where tankers will carry oil across the Caspian Sea to the Baku-Tbilisi-Ceyhan system on the territory of Azerbaijan.

The Kashagan deposit located off the Caspian Sea coast will become the main resource base for the Trans-Caspian Oil Transportation System.

At the initial stage, the system is expected to transport 25 million tonnes of oil annually to global markets through the BTC, with a subsequent increase to 38 million tonnes a year.

KazMunayGas put the total cost of the project at $4 billion, which could be provided by foreign investors.