Escaping Russian transit oil pipelines: Kazakhstan has transported a cumulative total of 3 million tons of oil via Azerbaijan, creating a new channel for diversified energy exports.
Kazakhstan International News Agency reported on May 15 that as the oil tanker "Aktau" successfully delivered the 3 millionth ton of crude oil to the Sangachal terminal in Azerbaijan after departing from Aktau Port, Kazakhstan's oil exports via Azerbaijan have entered a new phase, highlighting the strategic importance of the trans-Caspian energy corridor in the country's energy strategy.
Bilateral cooperation continues to advance and oil transportation steadily grows.
Kazakhstan began transporting crude oil via Azerbaijan in March 2023, with the first batch coming from the Tengiz oilfield. Later, the Kashagan oilfield also joined the transportation process. In January 2024, the first oil tanker loaded with Kashagan crude oil departed from Aktau Port and successfully arrived in Azerbaijan.
Currently, Kazakhstan’s oil being transported to Azerbaijan continues to inject into the strategically significant "Baku-Tbilisi-Ceyhan" (BTC) pipeline system. This pipeline serves as an alternative export channel for Kazakhstan to reach Mediterranean countries and Turkey. In 2023, the total amount of Kazakhstan’s oil exported through this route reached 1.4 million tons.
According to forecasts, the throughput via this pipeline is expected to increase to 1.7 million tons by 2025, gradually achieving the content of the agreement signed between Kazakhstan and Azerbaijan in March 2024 to enhance transportation scale. According to the agreement, the transportation scale will be increased to 2.2 million tons in the coming years, with the long-term goal of reaching an annual throughput of 20 million tons.
Quality and infrastructure challenges coexist.
As Kazakhstan and Azerbaijan deepen their energy cooperation, they also face challenges related to oil quality and infrastructure. Due to the high sulfur content of crude oil produced by Kazakhstan’s Tengiz and Kashagan oilfields, there are quality differences compared to Azerbaijan's light crude oil, Azeri Light. Experts pointed out that if the mixed oil issue is not properly handled, it may affect the market price and brand value of Azerbaijan's crude oil.
To address this, Kazakhstan and Azerbaijan have now entered a four-month trial operation phase to assess the impact of Kazakhstan's crude oil on overall oil quality. Kazakhstan is studying the implementation of a "quality bank" mechanism for oil to ensure the interests of all parties. This mechanism aims to balance the market value of different oil qualities through technical means and provide compensation solutions for oil producers.
In addition, to achieve the annual throughput target of 20 million tons, Kazakhstan needs to significantly improve its oil and gas infrastructure, including constructing new pipelines, adding compressor stations, and addressing potential environmental and political risks associated with trans-Caspian transportation.
Prospects for regional energy cooperation.
Kazakhstan's oil exports via Azerbaijan have become an important part of the country's diversified energy export strategy, reflecting the strategic depth of medium- and long-term regional cooperation. As the scale of transportation continues to expand, Kazakhstan and Azerbaijan's economic and trade ties will deepen further, jointly expanding influence in the global energy market, contributing to energy security and economic growth across the entire Caspian region.
Previously, analysis indicated that Aktau Port has the capacity to handle larger-scale transportation tasks, and Azerbaijan has shown a positive willingness to expand cooperation. In the future, through steady expansion of cooperation and continuous optimization of oil management mechanisms, the energy partnership between Kazakhstan and Azerbaijan is expected to enter a new phase.
Original article: https://www.toutiao.com/article/1832159053254659/
Disclaimer: The article represents the views of the author only.