Nazarbayef soft-pedals Iranian pipeline route

Sam Fletcher
OGJ Online

HOUSTON, Dec. 20 -- In a Houston speech late Wednesday, Kazakhstan President Nursultan Nazarbayef seemed to play down a proposed oil and natural gas pipeline route through Iran that he pushed for in talks earlier this month with US Sec. of State Colin L. Powell.

Responding to a question about the "most important pipeline routes" to carry oil and gas from the prolific Caspian Sea region to world markets, Nazarbayef said Iran is among a number of potential routes being considered. Other possibilities include routes through Russia and Poland to the Baltic Sea or eastward to western China, he said.

"Our priority for the near term has already been fulfilled for the next 7-10 years," Nazarbayef said in Russian through an interpreter. However, he later said additional pipeline capacity would be necessary when development of Kazakhstan's huge Kashagan oil discovery begins after 2005.

Late last month, US Energy Sec. Spencer Abraham attended the opening ceremony for the 900-mile pipeline that extends from the large Tengiz and other oil fields in western Kazakhstan to a new terminal on the Black Sea near Novorossiysk, Russia (OGJ Online, Nov. 27, 2001). The first oil through that pipeline reached the terminal in August and tanker shipments from Novorossiysk started in October. That pipeline is expected to reach its capacity of 600,000 b/d in the first half of next year.

It took almost a decade to complete that $2.65 billion project, although construction started only in 1999.

At a Dec. 9 meeting with Powell in Kazakhstan, Nazarbayev urged the US to consider the Iranian route as the most direct and cost-effective means of moving Caspian oil and gas into world markets.

"I say frankly that our investors who work on oil consider that the most beneficial route is through Iran to the Persian Gulf," he said at that time.

Although Powell didn't rule out an Iranian route, he reiterated the US view, first developed by President Bill Clinton, that routes through Russia and Turkey are preferred and would be sufficient to handle Caspian production.

Nazarbayef was less emphatic about the Iranian route in his talk Wednesday evening at the James A. Baker III Institute for Public Policy on the Rice University campus in Houston. The future route for an additional pipeline from the Caspian area to outside markets will be "decided by the (participating development) companies after their evaluation of costs of transportation," he said.

That speech to a small invited group was billed as the only public presentation scheduled for Nazarbayef during his current visit to the US at the invitation of President George W. Bush. The purpose of his visit, said Nazarbayef, is to "adopt an energy partnership" for development of Kazakhstan's rich oil and gas resources.

"We will do our best to attract investors," he said.

After meeting with oil company representatives in Kazakhstan earlier this month, Powell said, "They were talking (of investing) in the range of $200 billion over the next 5 to 10 years because they see that kind of potential."

The five countries in the Caspian area -- Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan -- are projected to have remaining petroleum liquids reserves of 39.4 billion bbl, said industry analysts (OGJ, Dec. 17, 2001, p. 18). Only their Caspian reserves are included in that number for Iran and Russia.

However, analysts said the discovery last year of Kashagan oil field, one of the world's biggest finds in recent times, has shifted the reserves balance clearly in favor of Kazakhstan. With that giant discovery, Kazakhstan now controls about 75% of the Caspian's petroleum liquids.

With estimated associated gas reserves of about 25 tcf, the Kashagan discovery also enhanced Kazakhstan's position as a regional gas player, bringing it in line with the vast remaining gas reserves held by Turkmenistan. Kazakhstan and Turkmenistan contribute 45% and 44%, respectively, of the Caspian's 207 tcf total remaining gas reserves.

When the Kashagan field is developed, Nazarbayef said, another pipeline would be needed to carry that oil to market.

Contact Sam Fletcher at samf@ogjonline.com

Related Articles

Continental Resources completes more Springer wells

02/10/2015 Wells competed by Continental Resources Inc. last year reaffirmed the repeatability and growth potential of the Springer play in South Central Okla...

Permian briefs

02/10/2015

After Keystone nod, Congress should okay ANWR leasing

02/09/2015 Now that it has passed legislation supporting the Keystone XL pipeline, Congress should approve oil and gas leasing of the Arctic National Wildlife...

OGJ's top tweets of 2014

02/09/2015 One of the most important concepts for any decent writer to master is this: Know your audience. Luckily for those reporting on news and technology ...

Study says most of California's fracturing done in Kern County

01/26/2015 Almost all hydraulic fracturing done in California happens in the southwest portion of the San Joaquin basin in Kern County, said a scientific stud...

Watching Government: This year's 'infrastructure' matters

01/12/2015 In one of the busiest Decembers ever for oil and gas in the nation's capital, one word-infrastructure-kept popping up as a key challenge for 2015.

For the US economy, a falling oil price has drawbacks, too

01/05/2015

Cheer in the US about an economic lift from falling oil prices needs qualification.

Russia sanctions realign Arctic exploration, geopolitics

01/05/2015 The latest Western sanctions on Russia's Arctic gas industry, including OAO Gazprom and OAO Novatek, have had a geopolitical impact on the Kremlin....

Trinidad and Tobago to develop ‘master plan’ for gas development

12/29/2014 Trinidad and Tobago’s government has hired UK-based consulting firm Poten & Partners to develop a natural gas master plan for the Caribbean twi...
White Papers

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected