Expertise
Across the Caspian Sea. Can Kazakhstan Diversify its Export Flows?
In late March 2023, a tanker named Akademik Khoshbakht Yusifzade, belonging to the Azerbaijan Caspian Sea Shipping Company, docked in Baku from Aktau. It carried 6.9 thous. tons of oil from the Kashagan field. The shipper was one of the shareholders of the North Caspian Consortium – the Japanese company INPEX North Caspian Sea.
Presidents of Turkey, Georgia, Azerbaijan, the Turkish Premier, and the BP President initiate the BTC operations. July 2006.
The shipment's purpose was to test a new Trans-Caspian oil export route from Kazakhstan – a transport artery not traversing through Russian territory. Mr. Hiroshi Ikeda, the General Director of INPEX's branch in Kazakhstan, stated the test was successful. In July 2022, Kazakhstan's President Kassym-Jomart Tokayev instructed the government and the national company KazMunayGas to intensify the development of maritime oil and petroleum product shipments across the Caspian Sea. These shipments would then move to global markets via Azerbaijani export pipelines.
In November, he clarified that oil shipments through the Aktau and Kuryk ports should reach 20 mln tons per year in the near future. This amount is over a third of the volume that's pumped through the primary route – the Caspian Pipeline Consortium. After the onset of hostilities in Ukraine in the spring of 2022, the Tengiz-Novorossiysk pipeline encountered a series of accidents and emergencies, leading to limitations on accepting oil from Kazakhstani shippers.
A Series of Mishaps with CPC
On March 22, 2022, the CPC announced that due to a hurricane and a severe storm around the Novorossiysk port, the offshore terminal facilities were severely damaged. As a result, only one of the three facilities remained operational, with repairs completed a month later.
In June, the CPC consortium again reported it couldn't fully fulfill its pumping commitments. This time, unexploded mines and shells from World War II found in the port waters were the reason. Demining operations meant the port had to close, and oil shipments would once again only proceed through one terminal, as stated by the consortium.
Then, in August, Kazakhstan's exports via the CPC were once again restricted. This time, two out of the three offshore terminals had to be shut down due to discovered cracks in the mounting joints. Repairs were prolonged until November because of difficulties procuring replacement parts due to Western sanctions against Russia.
Given these circumstances, in early July 2022, the country's president, Kassym-Jomart Tokayev, while discussing the country's transport-transit potential development with the government, identified oil export diversification as a top priority. He emphasized the Trans-Caspian route, stating, "I task KazMunayGas to devise an optimal implementation strategy, including the possibility of engaging investors from the Tengiz project."