June 10, 1997 Kazakhstan and Azerbaijan have agreed to build an oil pipeline across the Caspian Sea, eventually reaching Turkey and allowing them to sell their crude on international markets.
"There must be a direct oil pipeline which will lead to Turkey's Mediterranean or Black Sea coasts -- any way suits us," Kazakh President Nursulatan Nazarbayev told. "The plan is...to lay a pipeline on the Caspian Sea shelf in the direction of (the Azerbaijani capital) Baku," he said. Nazarbayev and his Azerbaijani counterpart Geidar Aliyev signed a memorandum on co-operation in transporting their rich oil reserves to international markets.
Nazarbayev said he and Aliyev had agreed Kazakhstan would eventually deliver to Azerbaijan up to 10 million tonnes of its crude a year by tanker. The oil would be then transported to Mediterranean or Black Sea ports across the Caucasus. "Kazakhstan wants to be a large oil producer," he added.
Kazakhstan -- five times the size of France and with a population of just 16.7 million people -- has the ambition to produce 170 mm tpy of crude (3.4 mm bpd) by 2010 to become the world's sixth largest oil producer.
Foreign companies have so far invested over $ 2 bn in Kazakhstan's oil and gas sector and made investment commitments worth tens of billions of dollars.
"By signing we...give a signal to the world's investors that probably this pipeline will transport large amounts of oil," said Nazarbayev. He declined to name the likely start-up date of the project. "The construction is being launched before the year 2000 and must be finished by the year 2003," Nurlan Balgimbayev, head of the state oil company Kazakh Oil, told. Balgimbayev said the pipeline -- over 2,500 km (1,560 miles) in length -- would run from western Kazakhstan southwards to Turkmenistan's Caspian Sea port of Turkmenbashi and then to Azerbaijan across the sea. The pipeline would then cross Georgia and Turkey and lead into Turkey's Mediterranean or Black Sea ports.
He said with time the pipeline would enable Kazakhstan to transport 45-50 mm tpy of oil (0.9-1.0 mm bpd). Azerbaijan would transport 30-40 million tpy (600-800,000 bpd), and Turkmenistan 5-10 mm tpy (100-200,000 bpd).
Kazakh Energy and Natural Resources Minister Viktor Khrapunov told that the cost of the project would total $ 2.5 billion, and its initial capacity would be 10 mm tpy (200,000 bpd).