Kazakhstan 2014 | ENERGY | FOCUS: PIPELINES

Kazakhstan's landlocked position makes getting its hydrocarbon resources to distant markets difficult. Never idle, however, the government has worked hard to develop new routes abroad.

With works underway to grow production at the Tengiz and Karachaganak fields, as well as the imminent beginning of production at Kashagan, Kazakhstan has looked to develop routes to China and Europe as a way of diversifying its export markets.


The CPC pipeline links up the giant Tengiz field with an oil terminal in Novorossiysk on Russia's Black Sea coast over 1,512 kilometers. In 2013, the pipeline was used to export 28.7 million tons of oil, according to the Ministry of Oil and Gas, making it the country's largest in terms of volume pumped. In 2010, shareholders agreed to put in motion a plan to up capacity to 67 million tons per year, including 52.2 million tons of Kazakhstani oil. The consortium consists of Transneft (24%), KMG (19%), Chevron (15%), and LukArco (12.5%), with expansion considered crucial to accommodate expansion at the Tengiz field.


The Kazakhstan-China Pipeline runs 2,227 kilometers from Atyaru Port to Alashankou, in northwest China. In 2013, it carried 11.8 million tons of oil. Built over three phases, the first line connected Kazakhstan's Kenkiyak with Atyrau, followed by a line that connected Atasu with Alashankou. The third line then connected the previous two, creating a link directly between Kazakhstan's Caspian coast and Xinjiang province. According to Ernst & Young (EY), Kazakhstan China Pipeline LLP, the operator, put two new pumping stations into operation in 2013, boosting capacity to 20 million tons a year.


This pipeline is second largest by volume exported, pumping 15.4 million tons in 2013. It provides Kazakhstan with a link to world markets through Russia and onto the Black Sea. The pipeline used to do the heavy lifting before the introduction of the CPC pipeline, but still remains a crucial export route.


Although not in the country, Kazakhstan has a deal with Azerbaijan to provide oil through the Baku-Tbilisi-Ceyhan pipeline (BTC), which links Azerbaijan to Turkey's Mediterranean coast through Georgia. The pipeline has a 1 billion barrel a day (bbl/d) capacity and Kazakhstan has the right to supply 500,000 bbl/d. Kazakhstani oil was carried across the Caspian Sea in tankers and loaded into the BTC for re-export in 2008 for the first time.


In order to further diversify export routes, work is ongoing on the Kazakhstan Caspian Transportation System (KCTC), which involves an a 829-kilometer, 600,000-bbl/d capacity onshore pipeline linking Eskene in the west of the country with Kuryk, near Aktau, the future site of a new oil terminal. A maritime link to Baku will then be developed, including the infrastructure required to get Kazakhstan's oil into the BTC pipeline. The total cost of the KCTC project is $4 billion, according to the US Energy Information Administration.

Elsewhere, a project to build a trans-Caspian pipeline is also under consideration, in a development that would provide a more direct route to Europe.