Eric Watkins
Senior Correspondent
LOS ANGELES, Jan. 26 -- Kazakhstan's state-owned KazMunaiGaz has signed a memorandum of understanding with Tengizchevroil and Agip KCO for the development of a new transport entity, Kazakhstan Caspian Transport System, to export Kazakhstan crude oil.
KazMunaiGaz Pres. Uzakbai Karabalin said the MOU is the first step in launching KCTS, which will help diversify his country's export routes and potential markets.
KCTS includes a planned Eskene-Kuryk pipeline to transport crude to Kazakhstan's Caspian coast where tankers would lift the oil for onward shipment to Baku, Azerbaijan. There, the Kazakh oil would be pumped into the Baku-Tbilisi-Ceyhan (BTC) pipeline.
Officials expect to launch KCTS in 2010-11 when the Eni SPA-led consortium Agip KCO starts production from Kashagan field in the northern Caspian Sea off Kazakhstan. Agip KCO expects to produce 140,000-260,000 b/d from the field as early as 2009, and then 1-1.2 million b/d after 2010.
According to the US Energy Information Administration, the $1.5 billion KCTS will also require expansions of the oil terminals at Baku and Kuryk.
EIA said large-scale production from Kashagan will require construction of a 450,000 b/d oil and gas treatment plant as well as completion of the Kazakh pipeline.
Contact Eric Watkins at [email protected].