Kazakhstan President Kasym-Zhomart Tokayev has called on state-owned oil and gas producer KazMunayGaz and government to speed up work on the diversification of oil export routes following a Russian court ruling that could threaten the stability of Kazakh oil transit shipments to international destinations.
Tokayev spoke on Thursday in an urgently called meeting in the capital of Nur-Sultan — the second top-level meeting in as many days — in reaction to a ruling by a district court in the Russian city of Novorossiysk for Caspian Pipeline Consortium operations to be halted for 30 days.
The consortium operates a key oil export line that runs from the Atyrau region in Kazakhstan to an offshore terminal near the Black Sea port of Novorossiysk.
The pipeline carries over 80% of Kazakhstan's total oil exports, or more than 1 million barrels per day.
Oil from neighbouring Russia is also transported to international markets via the system, with a reported total of 1.24 million bpd scheduled to be carried in July.
Tanker loadings at Caspian Pipeline’s offshore buoys will be suspended as soon as court bailiffs arrive to the loading terminal near Novorossiysk with necessary paperwork, the company said.
The court is scheduled to hear Caspian Pipeline's appeal of the ruling on 11 July, the operator said, adding that it will inform the public on the arrival of bailiffs.
The ruling threatens to halt oil production at three key foreign-led developments — Tengiz, Kashagan and Karachaganak — but the government has maintained a conciliatory tone towards Russia.
A spokesman for Tokayev, Ruslan Zheldibay, wrote in a social media post that “Russia will remain [Kazakhstan’s] strategic partner and ally”.
Kazakh authorities will not engage in “any action to harm [Russian] interests”, he added. “We hope that similar actions will not be taken against Kazakhstan either.”
Russian troops and law enforcement were airlifted to major cities in Kazakhstan in January to assist authorities in dispersing and calming nation-wide street protests and riots.
However, last month in St Petersburg, Tokayev told Putin that the country will never acknowledge the independence of Luhansk and Donbass, the breakaway regions in eastern Ukraine whose interests the Kremlin claims to be defending in its military invasion.
Zheldibay added that the diversification of export routes is not “a one-day job but rather the [country’s] long-term plan”.
Cross-Caspian export route
One large project in the diversification plan is the long-discussed expansion of the Kazakh port of Aktau on the Caspian Sea, supported by the construction of a fleet of shuttle tankers, each capable of carrying close to 500,000 barrels of oil about 400 kilometres across the sea to a discharge terminal near Baku, Azerbaijan.
From there, Kazakh oil can enter the Baku–Tbilisi–Ceyhan trunkline running across Azerbaijan, Georgia and Turkey to a large export terminal on the Mediterranean Sea.
Some volumes can also be shipped via the shorter Baku–Supsa pipeline that ends at a terminal on the Black Sea coast in Georgia.
A 765-kilometre onshore trunkline is also proposed to link oilfields in the Atyrau region and the Tengiz and Kashagan developments with the Aktau terminal.
The proposal initially calls for shipping capacity of about 490,000 bpd but could be expanded to about 1.2 million bpd, according to the Kazakh industry's social network channel, Energy Monitor.
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