Kazakhstan will begin pumping oil bypassing Russia from September – Reuters
Kazakhstan will begin selling part of its crude oil, bypassing Russia, through Azerbaijan's largest oil pipeline from September this year.
It is reported by Reuters.
A publication source with direct knowledge of the situation said that the Kazakh state oil company KazMunayGas (KMG) is in preliminary negotiations with the trading arm of the Azerbaijani state company SOCAR about permission to sell 1,5 million tons of Kazakh oil per year through the Azerbaijani pipeline, which delivers oil to the Turkish Mediterranean port of Ceyhan.
The volume of just over 30 barrels per day is insignificant compared to the usual 000-1,3 million barrels per day passing through the CPC pipeline.
The final contract is due to be signed at the end of August, and flows through the Baku-Tbilisi-Ceyhan (BTC) pipeline will begin in a month, the source said.
According to two other sources, another 3,5 million tons of Kazakh oil per year could begin flowing in 2023 through another Azerbaijani pipeline to the Georgian Black Sea port of Supsa.
Combined with supplies through BTC, the volume would be equal to just over 100 barrels per day, or 000% of CPC supplies.
“Reliance on Azerbaijan allowed Kazakhstan to bypass Russian territory. Last month, BP Azerbaijan said it would redirect flows from the Baku-Supsa pipeline to the larger BTC pipeline. However, the new BTC route means that Kazakhstan will have to rely on a fleet of small tankers to transport oil across the Caspian Sea to Baku from the port of Aktau, which has limited spare capacity,” the publication says.
The Tengizchevroil joint venture, led by oil company Chevron, has its own marketing unit and is negotiating its pipeline and rail routes separately, two of the sources said.
The BTC pipeline could also be an option for Tengizchevroil, but the source said that if agreed, it could take up to six months for supplies to begin.
Tengizchevroil had already begun redirecting small volumes of oil by rail to the Georgian port of Batumi in April when a hurricane caused part of the CPC terminal to fail. Two sources said Tengizchevroil is ordering more rail shipments, and there could be more in September or October.
Kazakhstan separately exports up to 1 million tons, or 250 barrels per day, of Urals crude through the Russian pipeline system to ports on the Black and Baltic Seas.
Kazakh oil exports account for more than 1% of global supplies, or approximately 1,4 million barrels per day.
For 20 years, they were supplied via the CPC pipeline to the Russian Black Sea port of Novorossiysk, which provides access to the world market.
In July, a Russian court threatened to shut down KTK, prompting the Kazakh government and major foreign producers to enter into contracts with other outlets as a precaution.
None of the alternatives is as practical as the CPC pipeline, which increases the risk of further instability in energy markets, the newspaper notes.
World oil prices today reached a 14-year high and remain high, maintaining an average of more than $100 per barrel.
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