Astana set to make an energy export break with Russia

analysis

Astana set to make an energy export break with Russia

By SRI ⋅ May 5, 2008 ⋅

Efforts to construct a trans-Caspian pipeline that would dent Russia’s energy-export dominance in the region continue to make incremental progress.

Much attention in recent months has focused on construction of a natural-gas pipeline across the Caspian. But it may prove that the first route under the sea would carry oil, and link in to the Baku-Tbilisi-Ceyhan (BTC). Attention is shifting to an oil transport route after Kazakhstan’s senate in late April ratified an energy export treaty with Azerbaijan. President Nursultan Nazarbayev’s signature is widely considered a formality.

The treaty sets out the conditions for shipping Kazakhstani oil to Western markets via a route that bypasses Russia, which currently enjoys a stranglehold on pipelines out of Central Asia. Treaty ratification also marks the start of an ambitious $3 billion project, the Kazakhstan Caspian Transportation System (KCTS), to build the infrastructure needed to ship the oil across the Caspian Sea. The first phase of the project involves construction of a pipeline that links the production center of Yeskene to the Caspian port facility at Kuryk. Beyond that, the Kazakhstani government is prepared to spend up to $10 billion in creating an energy export hub at the western coastal city of Aktau, according to a report distributed by the RIA Novosti news agency. Construction of the hub could take up to five years.

EurasiaNet - Joanna Lillis