Kazakhstan may be interested in shipping oil through Baku-Ceyhan pipeline

Mar 01, 2001 01:00 AM

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.

Source: AP
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