KAZAKHSTAN ENERGY WEEK - 2025
Kazakhstan Diversifies Oil Exports
At the beginning of August 2025, the national company KazMunayGas sent its first shipment of crude oil to Hungary, totalling 85,000 tons. Maritime transportation from the port of Novorossiysk to the Croatian port of Omišalj was carried out by the national carrier Kazmortransflot (a subsidiary of KMG) on its tanker Alatau. From there, the crude was pumped to its final destination, the Százhalombatta Refinery, through the Adriatic pipeline operated by the Croatian company Jadranski naftovod (JANAF).
Upon the tanker’s arrival in Croatia, representatives of KazMunayGas, Hungary’s MOL Group, and JANAF held a meeting to discuss prospects for further cooperation. Following the talks, KMG and MOL Group signed a framework agreement on future crude oil supplies, KMG reported.
In this way, Kazakhstan tested yet another alternative route to the Tengiz–Novorossiysk pipeline of the Caspian Pipeline Consortium, through which the country has exported more than 80% of its crude in recent years.
Kazakhstan is one of Eurasia’s key oil producers, but, unlike Middle Eastern exporters, it lacks direct access to open seas. Geography dictates that logistics are not an “auxiliary function” but a strategic asset on par with reserves and production volumes.
Reliance on the CPC route continues to secure the lion’s share of export deliveries. However, after February 2022, the state set a course for accelerated development of alternatives to reduce transit and geopolitical risks, improve maneuverability in EU and Turkish markets, and strengthen resilience to unscheduled CPC disruptions.
CPC Remains Dominant, but Alternatives Are Being Pursued
The Tengiz–Novorossiysk pipeline has historically been the backbone route of Kazakhstani oil exports. According to the Ministry of Energy, 54.9 mln tons of crude were shipped to global markets via it in 2024 out of 68.6 mln tons of total exports. At the same time, the alternative channels, taken together, have increased capacity year by year, including Atyrau–Samara, across the Caspian Sea, to China, and now to Croatia.
Important context: the diversification course is not a “replacement” of CPC; it is the creation around it of a network of several resilient routes, each of which solves its own task, provides access to specific refining capacities, blending flexibility, bypasses “bottlenecks,” and minimizes political risks.
The Trans-Caspian Puzzle
The key alternative to CPC has been the route across the Caspian from the port of Aktau to the port of Baku, and further into the Baku–Tbilisi–Ceyhan (BTC) pipeline with loading at the Turkish port of Ceyhan. Its basis is commercial agreements between KazMunayGas and the State Oil Company of Azerbaijan, SOCAR: in 2023–2024 a throughput volume of 1.5–1.8 mln tons per year was agreed with subsequent growth; for 2025, 1.7–2.2 mln tons is provided, and in the strategic perspective scaling to 5–7 mln tons is under discussion subject to expansion of shore and port infrastructure in Aktau and Baku.
In H1 2025, deliveries via BTC increased by roughly 12% year-on-year to 785,000 tons. The figure may appear modest against nearly 55 mln tons via CPC, but it is significant. The key bottlenecks to “de-bottleneck” are the need to modernize the port of Aktau, expand the receiving terminal on the opposite Caspian shore, the decline in sea level, and a shortage of tankers.
Another issue in Kazakhstan’s cooperation with Azerbaijan in oil transportation is that the countries produce crude of different qualities: SOCAR supplies the global market with high-quality light grade Azeri Light, while Kazakhstan supplies heavier grades with higher sulphur content; therefore, the BTC pipeline can accept a limited volume of crude from Kazakhstan. “At present we can receive no more than 2.2 mln tons of Kazakhstani crude for BTC so as not to worsen quality. Buyers value the low sulphur content of Azeri Light at BTC’s outlet,” SOCAR Vice President Elshad Nasirov said in a Reuters interview in November 2024.
Baku–Supsa: Another Route to the West
The restart of the Baku–Supsa pipeline, which has been idle since March 2022, could resolve this issue. It would significantly simplify the transit of Kazakhstani crude, as exports would flow through a dedicated line with a throughput capacity exceeding 7 mln tons per year, without blending with other grades.
Kazakhstan’s Minister of Energy, Yerlan Akkenzhenov, in an interview with Azerbaijani media in summer 2025, stated that “the potential increase in demand for Kazakhstani crude in the West raises the question of its transit through Azerbaijan via the currently idle Baku–Supsa pipeline.” According to the minister, Astana sees clear prospects for crude exports to the West along this route, which is why Kazakhstani oil companies remain in constant contact with their Azerbaijani counterparts.
KCTS: An Option for Growth
The Kazakhstan Caspian Oil Transportation System (KCTS) is a project conceived in the mid-2000s as a strategic channel for exporting crude oil from the giant Kashagan field (then only in the process of development) and Tengiz. The concept included a pipeline from Eskene near Atyrau to the port of Kuryk in the Mangistau Region, a terminal, and a tanker fleet on the Caspian. It also involved further delivery to the western shore of the Caspian (Baku or other ports) and integration with the Southern Corridor (BTC, Baku-Supsa). Initially it envisioned 25-38 mln tons per year with expansion potential. For Kazakhstan, this would mean a fully independent alternative to CPC and direct access to the Mediterranean.
The project was worked out at the feasibility study level, and part of the preparatory work (route geology, technical and economic studies) was completed by 2010. However, further implementation was deferred for several reasons.
- Cost, according to early-2010s estimates KCTS required $4-5 bln of investment, which looked excessive during the low oil prices of 2014-2016.
- Focus on CPC, expanding CPC proved cheaper and faster, and investors (primarily the shareholders of the Tengiz and Kashagan projects) preferred it. Moreover, production at Kashagan began much later than initially anticipated, and its volumes proved to be significantly smaller. The transition to Phase II of the project has been repeatedly postponed.
- Due to the complexity of political and infrastructure requirements, KCTS necessitated synchronization with Azerbaijan and the BTC operator, as well as the development of a dedicated tanker fleet and an oil terminal from scratch.