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New Regional Export Capability Critical to Realising Kazakhstan’s Oil Potential
Figure 3: A Tanker Passing Through the Turkish Straits
Integration and Co-operation
There are other elements of the regional oil export future to
consider, including managing the tanker traffic from the Black Sea
through the Turkish Strait (see Figure 3). Currently, all of the oil
shipped through the CPC to its Black Sea terminal north of the port
of Novorossiysk passes through the Turkish Straits to reach world
markets; so does the oil that Tengizchevroil moves by rail to the port
of Odessa in Ukraine (see Figure 4). Turkish Straits bypass solutions
are being proposed that are designed to relieve pressure on the
waterway, with two leading contenders emerging: a Trans-Balkan
Pipeline (TBP) bypass line from the Black Sea port of Burgas in
Bulgaria to the Greek port of Alexandropoulos on the Adriatic Sea,
and a route through Turkey from Samsun on the Black Sea to the
existing terminal of Ceyhan on the Mediterranean. Crucial to either
of these solutions would be a commitment to regularly supply that
new line with equal volumes of Russian and Kazakh oil, thus sharing
the cost of easing the congestion in the Straits.
Figure 4: Caspian Pipeline Consortium Marine Terminal Shore Facilities Managing Risks and Sharing a Vision
in Yuzhnaya Ozereyka near Novorossiysk
Generally, the international oil industry is risky and in Eurasia
transportation adds an additional level of complexity. Diversification of
export routes for governments and individual fields is a way to mitigate
some of those potential risks. To accomplish this, both governments
and international oil companies must co-operate in the development of
additional export routes.
Summary
The KCTS would require integrated management support and
partnership commitments to finance, build, supply and operate. It
would require Kazakhstan, Azerbaijan, Georgia, Turkey and the
numerous international oil companies to share a vision for our industry.
Matching export capability
with growing production
terminal facilities would be constructed. New tankers with capacities
of up to half a million barrels would need to be constructed in
from the Tengiz field was
Azerbaijan, Kazakhstan or Russia to support this new KCTS for the
a major challenge from
long term, providing yet another boost to the regional economy.
the dawn of our partnership
The Baku–Tbilisi–Ceyhan Connection
with Kazakhstan.
For the KCTS to work, construction of a large receiving terminal on the
other side of the Caspian in Baku will be necessary. Oil could be moved
from there via rail through Azerbaijan and Georgia to the Black Sea – Despite the differing interests and approaches of the various
as it was for many years – or, conceivably, through a new pipeline to stakeholders, and the pressures of today’s lower oil prices, we must
replace the rail transport. However, here is where the KCTS holds work today on reliable oil export solutions to ensure that Kazakhstan’s
special promise. Oil production from Azerbaijan’s Azeri–Chirag– petroleum sector achieves its growth potential tomorrow. n
Gyuneshli fields is expected to begin to decline around 2013 and open
surplus capacity in the BTC. Perhaps 600,000 b/d could be available on Chevron Corporation, one of the world’s largest integrated oil
the BTC by 2020, and more if BTC is expanded. companies, holds a 50% share of Tengizchevroil, operator of
Kazakhstan’s Tengiz Field, and a 20% non-operating interest in the
This sets up an excellent opportunity for Kazakhstan and its partners to Karachaganak condensate and gas project. It is a major investor in
secure a substantial, established export option to the Mediterranean, the CPC, holds a 10.3% interest in the Azerbaijan International
and for Azerbaijan, Georgia and Turkey to enjoy higher utilisation rates Operating Company – operator of the Azeri–Chirag– Gunashli project
on the BTC for the longer term. Viewed through this lens, the KCTS in the Caspian Sea – and is a partner in the BTC pipeline. The company
holds considerable appeal, despite its complexities, and it illustrates also operates a polyethylene pipe plant in Atyrau. Underscoring its
again how creative co-operation in the petroleum sector may again leading presence among oil majors in the region, Chevron opened
contribute to regional economic unity. its first office in Turkmenistan in early 2008.
EXPLORATION & PRODUCTION – VOLUME 7 ISSUE 2
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