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Ebb & Flow

Overcoming its landlocked nature, Kazakhstan is developing its network of pipelines to transport its oil and gas products to global markets.

With proven oil reserves of 30 billion bbl and significant gas reserves to boot, Kazakhstan has emerged as a major player on the global oil and gas stage. A landlocked country, the Central Asian state has invested heavily in the right pipeline infrastructure to ensure its hydrocarbons reach foreign markets.

Kazakhstan has four main oil export routes, including the Caspian Pipeline Consortium (CPC), the Kazakhstan-China pipeline, the Atyrau-Samara pipeline, and the Baku-Tbilisi-Ceyhan (BTC) pipeline, into which Kazakhstani oil is pumped after shipment across the Caspian. The CPC pipeline runs 1,510 kilometers from the Tengiz field to the Russian Black Sea port of Novorossiysk, and is operated by Transneft (24%), KMG (19%), Chevron (15%), and LukArco (12.5%). The Kazakhstan-China pipeline secures oil exports to the east, and stretches 2,228 kilometers from Atyrau in the northwest, to Alashonkou in China’s northwest Xinjiang region. With a capacity of 200,000 bbl/d, China receives 4% of its total oil imports through the vein, with oil to also be transported from the Kashagan field in the future. Atyrau-Samara has a larger capacity of 600,000 bbl/d, connecting Kazakhstan’s oil fields into the Russian network, which then finds its way to the international market. Upgraded in 2009, it is considered the most important of all Kazakhstan’s pipelines.

The final piece of the puzzle is BTC, with Kazakhstani oil shipped across the Caspian and then fed into the pipeline. Rail transport via Georgia to the Black Sea is also an option. Although only 100,000 bbl/d was exported via this system in 2009, an agreement signed between Kazakhstan and Azerbaijan has paved the way for up to 500,000 bbl/d to be transported in the future. In accordance with this agreement, Kazakhstan is developing the Kazakhstan Caspian Transportation System (KCTS), which includes the construction of a 700 kilometer pipeline from Eskene in western Kazakhstan to Kuryk on the Caspian shore near the city of Aktau, where a new oil terminal with 760,000 bbl/d capacity is to be built. This system includes a maritime link to Baku, the construction of a new fleet of tankers, port facilities as well as a transfer station in Baku in order to facilitate the loading of the crude into the BTC pipeline to Turkey.

In terms of gas, Kazakhstan is currently acting mainly as a transit state for gas pipeline exports from Uzbekistan and Turkmenistan to Russia and China. The country has two gas distribution networks, one in the west, which serves the Kazakhstani producing fields, and the other in the south, delivering imported gas to consuming markets. Gas is then transported via the Central Asia Center Pipeline (CAC), stretching from the Kazakhstan-Uzbekistan border to Russia, the Central Asia Gas Pipeline (CAGP), connecting Turkmenistan and Uzbekistan to China with a capacity of roughly 460 billion cubic feet (bcf), and the Bukhara-Urals and the Tashkent-Shymkent-Bishkek-Almaty pipelines, which connect Uzbekistan to Russia via Kazakhstan with a capacity of 706 bcf, and Uzbekistan and Kazakhstan’s southern market with a capacity of 160 bcf, respectively. Two further projects are under development, including the Kazakhstan-China Gas Pipeline (KCGP), enabling Kazakhstan to export gas from the Aktobe, Tengiz, and Karachaganak fields to China, and the Trans-Caspian gas pipeline, which will allow Kazakhstani gas to reach Europe, bypassing Russia and Iran.