TotalFinaElf to study southern route for Caspian pipeline

TotalFinaElf SA has been named to undertake a feasibility study for a 'southern route' pipeline to transport oil from Kazakhstan via Turkmenistan to Iran, according to Paris-based Petrostrategies. Citing 'reliable sources,' the energy weekly reported this week that the Kazakhstan government had awarded the French energy combine an 'official operator's mandate' to look into a pipeline that would run from the recently discovered giant Kashagan oilfield to the Iranian town of Neka.


Darius Snieckus
OGJ Online

PARIS�TotalFinaElf SA has been named to undertake a feasibility study for a "southern route" pipeline to transport oil from Kazakhstan via Turkmenistan to Iran, according to Paris-based newsletter Petrostrategies. Citing "reliable sources," the energy weekly reported this week that the Kazakhstan government had awarded the French energy combine an "official operator's mandate" to look into a pipeline that would run from the recently discovered giant Kashagan oilfield to the Iranian town of Neka.

The proposed export line, the Kazakh Turkmen Iran Oil Pipeline, would cost some $1.6 billion to construct and carry 500,000 b/d to refineries in northern Iran. Capacity could be raised to 1 million b/d at a cost of a further $500 million, Petrostrategies reported. Among the various export routes that pipeline could take is one dubbed the "median line" starting in the Tengiz region and running 510 km to the Turkmen border and then on some 740 km to Neka.

Such a pipeline project, even in its "infancy," would fly in the face of widely publicized�and US government backed�plans to build a 1,730-km pipeline from Baku via Tiblisi to Ceyhan. The so-called Main Export Pipeline (MEP) is an export route that became a "realistic" option in 1997 when the Azerbaijani International Operating Co. brought the Azeri-Chirag-Guneshli fields onstream.

Moving the MEP off the drawing board and toward startup in 2005 has now being newly threatened by various cost estimates ballooning upward to $4 billion�and a scarcity of financial backers, lending support to the MEP's detractors.

Determining the actual size of the Kashagan discovery is proving difficult for operator Offshore Kazakhstan International Operating Co. A second well is to be spudded soon to firm up current reserves estimates which range from 25�60 billion bbl.

US special ambassador to the Caspian Region John Wolf's prompting last week of Kazakhs to "get in there and work" on the MEP project has met with a frosty response due the Kazakhs' belief that the US has played favorites in backing the latter pipeline to the exclusion of all others.

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