A need for the Kazakhstani Caspian oil transportation system to arise by the 2nd phase of the Kashagan development

Almaty. February 15. Silkroadnews – A need for the Kazakhstani Caspian oil transportation system (KCTS) will arise for Kazakhstan by the 2nd phase of the Kashagan development, Trend reports.

“The possibility to transport the Kazakhstani oil through the port of Aktau via Azerbaijan in future will depend on this direction’s economic feasibility”, officials of the ministry of energy of Kazakhstan said.

In 2016, according to the ministry, this route was not used for Kazakhstani oil export. In previous years Kazakhstan transported its oil using the pipeline “Baku-Tbilisi-Ceyhan” and by rail from Baku to the Black Sea ports of Georgia.

As representatives of ministry of energy reported, “on the results of developed long-term balance of oil production and distribution in Kazakhstan it was concluded that by the beginning of the second phase of development of Kazakhstan’s Kashagan field there will arise a need for the KCTS project”, in the meantime there are no talks held with the Azerbaijani side on this.

The forecast also takes into account that the capacity of the Caspian Pipeline Consortium oil pipeline currently used to transport the Kashagan oil for export will be increased through the implemented expansion project.

To remind, extraction at the Kashagan oil field got resumed in the autumn of 2016 after an accident in the pipeline system in 2013. Entering the second phase of the Kashagan field development will take few years, the exact timings have not been specified yet.

The Kashagan field located in the northern part of the Kazakhstani sector of the Caspian Sea is one of the largest oil fields discovered over the last 40 years. Its recoverable reserves are estimated as 9-13 billion barrels.

Kazakhstan expects that in 2017 Kashagan will produce 8.9 million tonnes of oil and 5.6 billion cubic meters of gas. In the following years it is planned to raise oil production to 13 million tonnes and production of gas to 9 billion cubic meters per year.

The KCTS project was at the agenda of active discussions in 2007-2009. The system assumed to consist of “Eskene-Kuryk” oil pipeline on the territory of Kazakhstan and the Trans-Caspian system, including the oil terminal in the port of Kuryk on the Kazakhstani coast of the Caspian Sea, tankers and vessels, oil discharge terminal on the Azerbaijani coast of the Caspian Sea and connecting facilities to “Baku-Tbilisi-Ceyhan” (BTC) pipeline system. Then oil was planned to transport to the international markets via the BTC oil pipeline and other oil transport systems located in the territory of Azerbaijan, Georgia and Turkey.

The project has been postponed due to uncertainty on terms of beginning of extraction works at the Kashagan field and expansion of Tengiz field in Kazakhstan.