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For Immediate Release
Friday, June 16, 2006
A Major New Oil Source to the West
Opens with Signing of Kazakh-Azeri Treaty
Kazakhstan officially joined the Baku-Tbilisi-Ceyahn (BTC) oil pipeline today when the presidents of Kazakhstan and Azerbaijan, Nursultan Nazarbayev and Ilham Aliyev, signed a treaty in Almaty.
“It is hard to overestimate the significance of the agreement just
signed,” a delighted President Nazarbayev said at a news
briefing in Almaty standing alongside President Aliyev. “We have
now secured the third alternative way for exporting our
hydrocarbons.”
Until today, Kazakhstan has been exporting oil via numerous
pipelines going west through Russia, including the Caspian
Pipeline Consortium’s pipeline to the Black Sea port of
Novorossiisk, and a pipeline eastward to China. The new
pipeline will provide oil producers in Kazakhstan, including
many Western oil firms, an opportunity to ship oil in a
southwestern direction, directly reaching the Mediterranean Sea.
The opportunity to ship 7.5 million tons of Kazakh produced oil through the BTC pipeline initially with the eventual expansion to 25 million tons is a welcome sign for booming oil production in Kazakhstan. Estimates put the Kazakh production by 2015 at 3.5 million barrels a day with exports reaching three million barrels daily. The biggest share of expansion of oil production, which currently stands at 1.2 million barrels a day, is expected to come from the mammoth $29 billion Kashagan offshore oil field developed by an international consortium in Kazakhstan’s sector of the Caspian Sea. Commercial production will begin in 2008.
President Aliyev also praised the agreement saying it will “define the development of our region for many years to come. The importance of the pipeline, now joined by Kazakhstan, is hard to overestimate as it will now become the largest oil artery in the region.”
The BTC pipeline is 1,767 kilometers long (443 kilometers in
Azerbaijan, 248 kilometers in Georgia, and 1,076 kilometers
in Turkey). Under the agreement, Kazakh crude will be
shipped from Aktau to Baku across the Caspian by tankers,
then pumped through the BTC pipeline all the way to
Turkey’s Mediterranean port of Ceyhan. The pipeline’s total
annual throughput is 50 million tons, or roughly one million
barrels per day.
The pipeline, supported by the United States, is a key
project aimed at reducing Western dependence on Middle
East oil. Earlier this month, U.S. President George W.
Bush sent a letter to President Aliyev expressing
Washington’s hope to see the agreement signed soon.
The pipeline also bypasses the shipping bottlenecks at the Turkish straits where in winter crude shipments can be held up for weeks.
The official ceremony celebrating the opening of the pipeline is expected to take place on July 13 in the presence of the leaders of the countries involved.
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For news and information bout Kazakhstan please visit us at www.kazakhembus.com
News Bulletin of the Embassy of the Republic of Kazakhstan to the USA and Canada
Contact person: Roman Vassilenko
1401 16th Street NW, Washington, DC 20036
Tel.: (202) 232-5488, ext. 104, Fax: (202) 232-5845
