|
|
 |
 |
|
 | | Connecting
Kazakh Oil
to the West |
|
|
| By Fuad Alizadeh |
|
Despite the increasing militarization of the Caspian Sea the future is in trade, not battleships.
Both Azerbaijan and Kazakhstan will benefit from large scale projects to exploit their offshore deposits. Indeed in Kazakhstan the development of the oil and gas sector is mostly dependent on the exploitation of the Caspian shelf. This is enabled in the decree of President Nursultan Nazarbayev signed on May 16 2003 which created a state program to develop the Kazakh sector of the Caspian shelf.
When the Kazakh oil is exploited there will be a need for transportation route to carry the "black gold" to the world markets. For that reason a possible new pipeline linking the Kazakh port of Aktau to Baku and then to the Turkish port of Ceyhan will be one of the priorities. This proposal of an underwater pipeline has received support because it will result in a sharp increase in the transportation of reserves and enable the transportation of resources from the western coast of the Caspian directly to western markets effectively bypassing Russia and Iran.
It is assumed that the volume of Kazakh oil via the Aktau-Baku route will be 20 million tons a year. But taking into consideration the above mentioned State Program of Kazakhstan, which includes the exploration of 120 different blocks, this export volume may be expected to increase substantially. This is the reason for the acceleration of intergovernmental negotiations between Azerbaijan and Kazakhstan in regard to the latter joining the Baku-Tbilisi-Ceyhan pipeline project. Although the approximate terms of deliveries of Kazakh oil are set for 2007-2010, the content of the intergovernmental agreement will be worked out for October 25 2003 when it will be signed at a meeting of the heads of SOCAR (State Oil Company of Azerbaijan Republic) and KazMunayGaz in Istanbul.
In the case that Kazakhstan's oil volumes will exceed 20 million tons we may consider different alternatives for transportation. The alternative to pipeline transportation is by sea tankers. In the sphere of sea transportation in the Caspian region, Caspar shipping company has until recently occupied the leading position. After the breakdown of the USSR Caspar inherited more than 70 transport ships, including eight railway ferries, 42 river-sea vessels, three 12,000 ton displacement tankers, two roll-on-roll-off vessels, and the Kaspvodput dredging fleet. This is not surprising as Baku was primarily the center of the Caspian region where all communications were centered and practically all transportations were organized by Caspar.
Certainly, ships, as everything else in the world, grow old and get out of action. It is natural, that Caspar has decided to renew its park by adding four more tankers (two tankers of 12 thousand tons displacement, others of 8 thousand tons displacement). As it is known, only one of tankers, "Professor Aziz Aliev", to a total value of 8 million 750 thousand US dollars, has been accepted on Caspar's balance. When the construction of the tankers is complete Caspar will able to transport up to 20 million tons per year. Therefore the planned increase in Azeri surface transportation can theoretically handle current volumes of Kazakh oil.
There is severe competition building in the shipping sector plus political and logistical issues which may prevent this route from becoming a reality. Projects are underway for the construction of six tankers of 63,000 tons each which may represent a great threat to Caspar's monopolism. At the moment they are intended to operate between Turkmenistan, Iran and Kazakhstan. However, the Iranian route is under question because of American pressure against cooperating with Iran who it designates as part of an "Axis of Evil" that supports international terrorism. On the question President Niyazov of Turkmenistan is less willing to abide by US wishes not to cooperate with Iran after the failure to realize the Transcaspian gas pipeline from Turkmenistan to the west. However in the case of Kazakhstan which has far more cooperative relations with US and American companies it does not want to complicate the transportation of oil resources by involving Iran. There may also be additional problems from a logistical point of view because because until now the greatest displacement on the Caspian was 12,000 tons. There will be a need for a radical change in port and harbour infrastructure to accommodate these new tankers. In the case of Azerbaijan the owners of the terminals will not be happy to reconstruct of their facilities regardless of support or solidarity with Caspar.
We should also consider the possible ecological consequences of increased surface traffic on the Caspian. In the case of a sudden increase in freight traffic in the Caspian Sea, a threat of an ecological disaster, if two tankers collide, will be catastrophic than a breach of an underwater pipeline. It is sufficient to remember the tragical disaster involving Azerbaijan ferry "Mercury-2" which sank in bad weather while sailing the same route from Aktau to Baku carrying railway tanks filled with oil.
Therefore we could argue the construction of a new pipeline rather than larger tankers as a more preferable and less complicated option. In fact over 180 kilometres of pipeline is already being laid to pump oil and gas from the Azeri-Chirag-Guneshli and Shah Deniz fields to the Sangachal terminal south of Baku. Therefore, the technology already exists to construct a possible pipeline between Azerbaijan and Kazakhstan.
As in the case of Baku-Tbilisi-Ceyhan (BTC) pipeline the foreign policies of the different states may be a deciding factor. Although Russia, Kazakhstan and Azerbaijan signed an agreement on May 14 2003 regarding their respective borders in the Caspian Sea Russia may want all five littoral states to agree on the final legal status of the sea before any new pipeline is built.
In actual fact at a recent conference in Almaty, Viktor Kalujniy, President Putin's special spokesperson on this issue, declared Russia's opposition to any subsea pipelines in the Caspian: "These [subsea] pipelines represent an ecological risk for the sea basin and the surrounding countries".
This delaying tactic similar to Russia's previous opposition to the BTC pipeline has yet to encounter American opposition. However, as BTC nears completion US foreign policy-makers will have to face the new question of how Kazakh oil will be connected to the West.
The general consensus at Baku's recent oil and gas exhibition was that there are still enough hydrocarbon resources in Azerbaijan to attract foreign investors. This idea was confirmed during the conference "The Decade of Achievements - Perspectives and Opportunities" within the framework of the 10th Caspian Oil & Gas Exhibition and Conference, which was held in Baku 3-6 June.
|
|
|
|
|
