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Kazakhstan - Caspian Sea

Kazakhstan is a Caspian Sea littoral state. The Caspian Sea represents Kazakhstan's only access to international maritime trade. Given the need to develop entirely new laws, procedures, equipment, vessels, and crews from scratch, it may take years before the land-locked country of Kazakhstan becomes a world-class maritime trading partner. The legal status of the Caspian area remained unresolved until 2018, mainly driven by a lack of agreement on whether the Caspian is a sea or a lake. Until all states agreed on a definition, the legal status of the area remained unresolved.

Aktau, located on shores of the Caspian and the capital of Mangystau Oblast, was only settled in 1961 and shows signs of its youth. The city's streets are not named, and camels still roam free on the road between the airport and the city. However, new construction projects are visible throughout the city. The oblast has three ports (Aktau, Bautino, and Kuryk), and another one planned (Sartas). The Kazakhstanis see Aktau as a potential "capital city" of the Caspian region, the central point for transportation, regional educational cooperation, and even tourism.

Kazakhstan's current oil production has been dominated by two giant onshore fields in the northwest of the country: Tengiz and Karachaganak, which together produced about half of Kazakhstan’s total petroleum liquids output in 2016. The offshore Kashagan field, in Kazakhstan’s part of the Caspian Sea, started production in October 2016. At full capacity, Kashagan will join Tengiz and Karachaganak as the three largest producing fields in Kazakhstan. The Kashagan field, the largest known oil field outside the Middle East and the fifth largest in the world in terms of reserves, is located off the northern shore of the Caspian Sea near the city of Atyrau, Kazakhstan.

Because of Kazakhstan’s landlocked location and the continued use of Soviet-era infrastructure, much of Kazakhstan’s oil and gas export infrastructure is integrated with major Caspian oil and natural gas export routes that interlink the region. Since independence, Kazakhstan has successfully expanded and diversified its export capabilities. Major crude oil export pipelines include the Caspian Pipeline Consortium pipeline to the Black Sea port of Novorossiysk.

Kazakhstan also exports crude oil via the Caspian Sea and via rail. Oil is loaded onto tankers or barges at Kazakhstan’s port of Aktau or the smaller Atyrau port and then shipped across the Caspian Sea, where it is loaded onto the Baku-Tbilisi-Ceyhan pipeline or the Northern Route pipeline (Baku-Novorossiysk) for onward transport, mainly to Europe.

On 12 September 2009, President Nazarbayev hosted the presidents of Russia, Azerbaijan, and Turkmenistan at a private resort in Kenderliy, south of the port city of Aktau in western Kazakhstan. According to press reports and interviews with government officials and resident diplomats, the presidents discussed economic, energy, environmental, and boundary issues. No documents were signed and no declaration was issued following the informal summit. The presidents stressed that they had not conferred on the delimitation of the Caspian Sea, and would not do so until all five Caspian littoral states, including Iran, had an opportunity to discuss the issue.

Hosting the summit showed Kazakhstan's interest, desire, and willingness to play the role of facilitator, honest broker, and balancer of interests among the other countries in the region. The summit also revealed Russia's continued desire to influence the policies of the other former Soviet states in the region, in order to maintain Russian control over the transportation of oil and gas from the Caspian.

Kazakhstan's Caspian maritime trade is carried out via its only international commercial seaport in Aktau. According to Talgat Abylgazin, director of the Aktau seaport, the port planned to ship 14 million tons of goods in 2009, up from 10 million tons in 2008. The current annual transshipment capacity of the Aktau seaport was 1.5 million tons of general cargo and over 10 million tons of crude oil and petroleum products.

KazMunaiGas-Transcaspian (KMG-TC), a wholly-owned subsidiary of national oil company KazMunaiGas (KMG) is responsible for the development of trans-Caspian maritime transportation of oil from Kazakhstan.

In December 2007 the European Commission concluded from the study "EU Feasibility Study of a Trans-Caspian Black Sea Gas Corridor" on establishing a gas transit corridor from Kazakhstan to the EU region that the project is feasible. The 400-page feasibility study looked at a variety of options for transiting the Caspian Sea, as well as weighing the various costs of a northern gas corridor through the Black Sea and a southern corridor through Turkey. It concluded that the most cost-effective option would be an all-pipeline option carrying 50 billion cubic meters (bcm) of gas per year from the Central Asia-Center pipelines at Beynau, Kazakhstan under the Caspian and Black Seas to European terminals, but caveated that judgment with the recommendation that resolution of the Caspian Sea's international legal status would help ensure the project's stability.

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Page last modified: 27-07-2018 23:51:14 ZULU