Oil transit via BTC strengthens Kazakhstan's energy security

The expansion of Kazakh oil exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline helps reduce geopolitical risks and dependence on transit states, which in turn enhances Kazakhstan's energy security.

As per Report, this is stated in an analytical review on the prospects for deepening economic cooperation between Azerbaijan and Kazakhstan, prepared by the Astana International Financial Center (AIFC) and the Institute for Development and Diplomacy (IDD) under ADA University.

The review notes that in the oil and gas sector, Kazakhstan and Azerbaijan are strengthening cooperation through the development of alternative oil export routes, in particular through the Baku-Tbilisi-Ceyhan (BTC) oil pipeline.

"Kazakhstan and Azerbaijan are countries with rich energy resources. Cooperation in the oil and gas sector is of strategic importance, as it allows for the most efficient use of natural resources, increased energy security and increased competitiveness in global markets. In 2024, Kazakhstan produced about 88 million tons of oil, and Azerbaijan - about 29 million tons. Thus, the combined oil production of the two countries amounted to about 117 million tons, which is a significant contribution to the global supply," reads the review.

It notes that Kazakhstan relies heavily on the Caspian Pipeline Consortium (CPC), which runs through Russia, to export oil to international markets. About 70% of the country's total oil production is exported, with CPC accounting for about two-thirds of that exported oil.

"It should also be noted that transportation via CPC is the most cost-effective option for Kazakhstan. However, given the strategic importance of oil for the country's economy, diversification of export routes through cooperation with Azerbaijan can help reduce geopolitical risks and dependence on a limited number of transit routes."

It is noted that Kazakhstan and Azerbaijan have already begun to implement cooperation in this area. In 2024, Kazakhstan exported over 1.4 million tons of oil via the Baku-Tbilisi-Ceyhan (BTC) pipeline, thereby demonstrating the viability of the model of using joint infrastructure.

"According to official forecasts, Kazakhstan plans to increase exports via BTC to 2.2 million tons per year in the short term and to 20 million tons in the long term as production increases and infrastructure coordination improves," reads the review.

It notes that in addition to oil transportation, the countries can also expand cooperation in the exploration and production of hydrocarbons. “For example, Azerbaijan has advanced competencies in geological exploration and field development, including large projects such as the Azeri-Chirag Gunashli (ACG) block and the Shah Deniz field. Combining expert knowledge can help accelerate the development of similar projects in Kazakhstan,” the document says.