Projects
Through Russia, Across the Caspian, or to China?
The Presidential Administration of Kazakhstan and the Antimonopoly Agency Have Different Opinions on the Matter
On July 30, 2024, the President of Kazakhstan, Kassym-Jomart Tokayev, approved the National Development Plan of the Republic of Kazakhstan until 2029.
"Kazakhstan's export-raw material economic model is limited in its ability to generate budget revenue and investment for diversification. Since 2014, the average annual growth rate of the national economy has slowed and currently stands at less than 5%. Against the backdrop of critical underinvestment, low levels of innovation, and economic productivity, this is insufficient to develop and replenish depleting fixed assets. In 2022, more than 15% of Kazakhstan's GDP and 70% of its exports were linked to mineral resource sectors," the document emphasizes.
The plan includes 17 development areas, grouped into four blocks based on the similarity of planned outcomes and implementation mechanisms. Each area has defined target indicators and their values for 2029 and key development priorities supported by a list of corresponding expected results.
One of the development priorities is the diversification of oil export corridors. The so-called Middle International Transport Corridor via the Caspian is expected to become a key additional export route. Additionally, in the event of any disruption in oil transportation through the Caspian Pipeline Consortium system, the unused capacities of the Atyrau-Samara and Kazakhstan-China pipelines could be utilized. In the mid-term, there are plans to increase oil transfer to tankers within the existing capacities of the Aktau port (up to 7 mln tons per year). Finally, the plan revives the long-established but previously shelved project of the Kazakhstan-Caspian Oil Transportation System (COTS). "The possibility of implementing projects to build the Eskene-Kuryk pipeline, marine terminals on the Kazakh and Azerbaijani coasts of the Caspian Sea, as well as a special large-capacity tanker fleet to further increase trans-Caspian shipments to 20 mln tons per year and beyond, will also be considered," the document states.
Just a few days after the National Plan was published, the Agency for Protection and Development of Competition of the Republic of Kazakhstan published on its website the results of an analysis of the oil transportation market via main pipelines for export purposes.
The conclusions in this analysis directly contradict some of the priorities outlined in the strategic plan. Is this a sign of dissent or interagency inconsistency?
Enough Pipelines, But Need More Oil?
The Agency concluded that as of February 2024, the most cost-effective route for Kazakh oil remains export through the Atyrau-Samara pipeline, followed by transport to the ports of Novorossiysk and Ust-Luga.