Kazakhstan plans to extend crude oil exports through the Baku-Tbilisi-Ceyhan (BTC) pipeline, probably rising from 1.5 million to twenty million metric tonnes yearly.
Power Minister Almasadam Satkaliyev referred to as it one of many “most promising” routes, noting a scientific improve within the quantity of deliveries of Kazakh oil “each on our facet and from the Azerbaijani companions.”
In line with the minister, Kazakhstan’s complete oil exports for 2024 are anticipated to succeed in 68.8 million tonnes, primarily through Russian routes, with smaller volumes transported by way of the Caspian Sea and pipelines to China.
The nation’s oil manufacturing is projected at 88.4 million metric tonnes this 12 months, beneath the unique 90 million tonnes goal, on account of upkeep and OPEC+ commitments. This output equates to about 1.82 million barrels per day.
From 2026, Kazakhstan goals to exceed 100 million tonnes of annual oil manufacturing as a result of implementation of huge initiatives. Satkaliyev additionally highlighted that common investments in oil manufacturing will quantity to about $21 billion by 2030.
The minister additionally introduced plans to design a brand new oil refinery within the nation, with a capability of 10 million tonnes a 12 months, with building really helpful to start out in 2032 to keep away from an anticipated scarcity of sunshine oil merchandise in 2036.
New bitumen manufacturing initiatives had been additionally talked about throughout Satkaliyev’s report, noting the necessity to work out problems with exporting Kazakhstani bitumen in instances of extra on the home market.
Increasing exports in Europe
Kazakhstan is poised to broaden its oil exports to Germany, responding to a request to greater than double shipments to 2.5 million tonnes yearly, as Berlin seeks options to Russian oil following the European Union’s embargo.
Kazakhstan started supplying oil to Germany through the Druzhba pipeline in early 2023 after a transit settlement with Russian transporter Transneft. Regardless of injury reviews to the pipeline in western Poland in early December, oil deliveries haven’t been interrupted.
The transfer to halt Russian oil imports highlights Kazakhstan’s rising significance within the European power market. EU sanctions on Russia prompted bloc leaders to diversify power sources and speed up renewable power adoption.
Hungary has expressed curiosity in Kazakh oil, signing an settlement with the state firm KazMunayGas (KMG) specializing in exploration, manufacturing, know-how switch, crude oil provide, and petrochemicals.
Hungary has already invested round $200 million in Kazakhstan, together with a 27.5 per cent stake within the Rozhkovskoye gasoline and gasoline condensate subject, which started manufacturing in December 2023, regardless of being found in 2008.
Kazakhstan is the ninth-largest crude oil exporter globally and holds 3 per cent of the world’s oil reserves. It’s the third-largest oil producer within the Caspian area after Russia and Iran.
Intertwined fates
Whereas the EU strengthened its connections with Norway and america following the Russo-Ukrainian warfare, Kazakhstan nonetheless closely depends on Russian infrastructure, exposing it to Moscow’s affect.
To scale back its dependency on Russian routes, Kazakhstan is investing in different commerce corridors, such because the Center Hall, a venture connecting the Trans-Kazakhstan railway to the Baku-Tbilisi-Kars railway, facilitating a direct hyperlink to the EU market.
Regardless of its historic ties to Russia, Kazakhstan has aligned with EU rules, refusing to recognise Moscow’s claims over occupied Ukrainian areas, enabling it to broaden its commerce and political partnerships with Europe.
However whereas different corridors have the potential to decrease Kazakhstan’s dependence on Russian-controlled oil routes, excessive prices stay a major problem, particularly for the BTC pipeline.
The price of transportation through the BTC–roughly $120 per ton–is thrice greater than the Caspian Pipeline Consortium (CPC) route, which transports oil from the Tengiz subject to Russia’s Novorossiysk port.
Though consultants acknowledge the BTC has the potential to bypass Russia completely, they observe it’s underutilised regardless of its capability to deal with as much as 60 million tonnes yearly. Increasing the pipeline’s use requires vital infrastructure investments.
Regardless of challenges and prices, growing different routes stays important to mitigate geopolitical dangers. With 60 per cent of Kazakhstan’s export revenues tied to grease and gasoline, any disruption to Russian routes might severely impression the economic system.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]