Kazakhstan may be interested in shipping oil through Baku-Ceyhan pipeline
Kazakhstan signed a memo indicating possible interest in shipping oil West through a planned pipeline from Azerbaijan
to Turkey, raising prospects that the project seen as strategically important by the United States could be
profitable. The United States has pushed for construction of the Baku-Ceyhan pipeline as an alternative to shipping
oil from the Caspian Sea region through Russia or Iran. An agreement on building the $ 2.7 bn project was signed last
fall and preliminary engineering work is under way.
However, some critics have questioned whether the pipeline would be economically viable. The use of the pipeline by
Kazakhstan, a vast oil-rich Central Asian nation across the Caspian from Azerbaijan, could be an important
boost.
The project faces stiff competition from Russia. An international consortium last year finished building a pipeline
from Kazakhstan to the Russian Black Sea port of Novorossiisk, and the first shipments through that pipeline are set
for the middle of this year. Representatives of the Kazak government, countries already participating in the
Baku-Ceyhan pipeline project and a US envoy in the Caspian region, Elizabeth Jones, signed a memo of understanding in
Kazakhstan's capital, Astana.
The memo does not oblige Kazakhstan to any actions, but it suggests the country is considering using the pipeline.
"We held a number of meetings with oil companies working in Kazakhstan and may say that there are companies that
express concern and are ready to cooperate with a group of sponsors of the Baku-Ceyhan project to study their
possible participation," said Kairgeldy Kabyldin, vice president of KazTransOil.
The Turkish Foreign Ministry issued a statement hailing the signing as "another important development" in the
Baku-Ceyhan pipeline project. Its participants include the Azerbaijan state oil company, BP and Ramco of the United
Kingdom, Norway's Statoil, Unocal of the United States, Japan's Itochu, Turkish TPAO and the Saudi-US company
Delta-Hess.