Kazakhstan President Kassym-Jomart Tokayev has urged action to be taken to establish alternative oil export routes from the country and reduce dependence on neighbouring Russia.

Kazakhstan has faced a string of restrictions this year on its main export pipeline running across the south of Russia to a terminal on the Russian Black Sea coast, operated by the Caspian Pipeline Consortium.

During his visits to the Mangystau and Atyrau regions earlier this week, Tokayev promised support for state-owned companies and private investors in the upgrading of tanker-loading facilities in the Kazakh ports of Aktau and Kuryk and in building additional shuttle tankers to operate in the Caspian Sea.

The aim is to allow transportation of about 150 million barrels per year of Kazakhstan oil across the Caspian Sea to Azerbaijan, where this oil can enter the existing pipeline network to reach Turkey and international markets.

Proposals for giving Aktau and Kuryk a prominent role in exports are nothing new in Kazakhstan, but investments have never materialised because the Caspian Pipeline, as a legacy pipeline link to the Russian gas trunkline network, has remained more economically attractive as a means of transportation.

Storage initiative

While visiting the oil province of Atyrau, where the Caspian Pipeline starts its route east, Tokayev asked state-run holding company KazMunaygaz, and other oil producers, to consider the viability of building onshore oil storage facilities at an alternative location for handling oil shipments.

The two key foreign-led oilfield developments, Tengiz and Kashagan, and one more foreign-managed producer in Karachaganak, are the main shippers of oil across the Caspian Pipeline to European and other international destinations.

Industry analysts in Astana, quoted by Kazakh industry discussion channel Energy Monitor, suggested that the storage proposal will also require legislative changes, such as the deferral of some direct levies on oil output, in order to motivate producers to put oil into storage, instead of marketing it immediately after production.

Domestic oil production rebounded this week rising by 11% to more than 2 million barrels per day on Monday on the back of higher production by Kashagan and Tengiz developments, according to the Kazakhstan Ministry of Energy,

But the key Caspian Pipeline is still carrying about 500,000 barrels per day under its capacity for between 1.2 million and 1.4 million bpd.

The capacity of the system has been restricted to around 800,000 bpd since September as the company tries to make repairs to two out of the three offshore tanker loading buoys.

Although Caspian Pipeline Consortium is understood to have completed the replacement of a damaged subsea buoyancy tank near the first loading buoy, it still has to conduct pressure tests then wait for shippers to supply a tanker to accept potentially off-specification oil that will come out from offshore loading hoses during a flushing procedure.

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