Kazakh energy resources may transit through Azerbaijan - UPDATED

Baku. 7 December. REPORT.AZ/ The sides have decided to set up a working group to investigate Kazakhstan's transit of energy resources through Azerbaijan.

Report informs, Azerbaijani Energy Minister Parviz Shahbazov said at briefing after the 14th meeting of the intergovernmental commission on economic cooperation in Baku.

"Kazakhstan and Azerbaijan have always cooperated in the energy sector and we are ready to continue to consider these issues. The most important point of this cooperation is the transit of Kazakhstan energy resources through Azerbaijan. We have decided to create a working group on this issue and intend to work hard in this direction”, he added.

***

Kazakhstan's Minister of Energy Kanat Bozumbayev said in Baku that it is planned to establish two working groups on transit of Kazakh oil and gas through the territory of Azerbaijan. According to him, the first working group is related to the transit of Kazakh oil through Azerbaijan. The minister said that the working group should study Azerbaijan's oil pipelines and transshipment capacity and competitiveness of this route for reception of Kazakh oil.

"Production launched at Kazakhstan's Kashagan field last year. Currently 250,000 barrels of oil is produced from this field per a day. Oil production from the field will increase 1.5-fold next year. In addition, work is underway to expand Tengiz field. Expansion works will allow to increase annual production from the field to 12 mln tons. Production of 39-40 mln ton is expected from this field after 2-3 years. At present, the main transportation route of the Kazakh oil is the Caspian Pipeline Consortium. Its transportation capacity makes 53-54 million tons for Kazakhstan", the minister said.

Kazakh Minister of Energy noted that opportunities will be created after 3-4 years to market additional volumes due to increase in production in the two fields and production in other fields. According to him, therefore, Kazakhstan considers prospectively oil transit from Azerbaijan: "We should to work within the Working Group to make this route more competitive compared to other routes. If we want oil transportation in this direction, we have to solve tariffs and other issues within 1-1.5 years".

Bozumbayev informed about the other working group and noted that the volume of associated gas production in Kazakhstan is growing and Azerbaijan is considered as one of the alternative routes.

The minister said that as one of the options, construction of LNG plant in western Kazakhstan and export of its product to the world market through Azerbaijan is planned: "The two countries have agreed to establish a working group with the participation of relevant ministries and agencies in this regard. This working group will conduct study regarding the project within several months".

The guest added that Kazakhstan produced over 50 billion cum of associated gas this year: "The production is growing every year. This year, we started exporting gas to China for the first time in the history. Initially, we plan export of 5 bln cum of gas next year. Besides, we cooperate with Russian Gazprom regarding gas transportation".