Kazakhstan to think through constructing oil pipeline at the Caspian Sea

According to the Ministry of Energy, Kazakhstan will examine whether it is possible to build an oil pipeline at the bottom of the Caspian Sea, although, in July 2023, KazMunayGas said that neither the company nor its partners were considering this option.

In addition, authorities are weighing the possibility of building an oil pipeline from Atyrau to Kuryk.

«We can increase our oil exports to 7 million tons per year by the Caspian Sea, which meets the current capacity of the port of Aktau. This would require about 10 new oil tankers with a deadweight of 12,000 tons to ensure that transportation is safe,» the ministry said.

In 2022, President of Kazakhstan Kassym-Jomart Tokayev instructed the cabinet to boost oil exports via the Trans-Caspian International Transport Route. To execute this task, KazMunayGas and SOCAR, the state oil company in Azerbaijan, agreed to export about 1.5 million tons of oil per year from the Tengiz oil field toward the Baku-Tbilisi-Ceyhan oil pipeline.

In July 2023, KazMunayGas announced the purchase of two tankers with a capacity of 8,000 tons. As a result, the company fully delivered its obligations of transporting 750,000 tons of oil along the Aktau – Baku route. KMG also noted that several companies were considering launching shipbuilding production in Kazakhstan.

In January 2024, KazTransOil reported that in 2023 it beefed up its oil exports from the Aktau seaport to the port of Baku to 1.4 million tons, which is 5.5 times more than in 2022.

Nevertheless, the Caspian Pipeline Consortium (CPC), stretching through Russia, is still the main export route for Kazakhstani oil, according to the country’s Ministry of Energy. This export route accounts for 80% of oil produced in Kazakhstan or 56.6 million tons out of 70.5 million.

«The safe and efficient operation of the CPC depends on Western equipment and services. Currently, the Ministry of Energy in conjunction with KMG, international oil companies and the CPC are taking necessary measures to ensure a smooth supply of equipment for the pipeline,» the ministry noted.

To ensure the stable and reliable operation of this crucial pipeline, Kazakhstan is negotiating with authorized agencies of the EU, the U.S. and the U.K. as the country wants these nations to grant waivers for equipment and services designated for the CPC, the ministry emphasized.