Oil transport and export continue to prioritize KTC, according to Tokayev, as shared in an interview with Al Jazeera.
Kazakhstan's President, Kassym-Jomart Tokayev, Discusses Alternative Routes for Oil Export in Exclusive Interview with Al Jazeera
In an exclusive interview with Qatari television channel Al Jazeera, President Kassym-Jomart Tokayev commented on alternative routes for the export of Kazakh oil, addressing concerns about strategic vulnerabilities due to reliance on the Caspian Pipeline Consortium (CPC).
An Al Jazeera correspondent, citing data from S&P Global, explained that around 80% of Kazakh oil is transported to Russia via the CPC. The correspondent inquired about this potential strategic vulnerability for the country.
"It is essential to remember that Russia is a strategic partner and neighbor of Kazakhstan. We share the longest border in the world with Russia. Our partnership with them is crucial, particularly in leveraging the CPC. Recently, I spoke with President Putin, and our conversation touched on matters related to the CPC. I am confident that the CPC will continue to serve as a valuable tool for transporting Kazakh oil through Russia to the European market and beyond," said Tokayev.
The interviewer asked if the President was concerned about the impact of the conflict in Ukraine on the possibility of sending Kazakh oil to Europe via the pipeline.
"We certainly take into account the situation in Ukraine and its impact on our strategic plans for natural resource export to the international market. However, we uphold our strategic partnership with Russia. Yet, we are not limited to a single transport link or route. When mentioning the Baku-Tbilisi-Ceyhan pipeline, the Middle Corridor, and other routes, you are absolutely correct. Nonetheless, if we discuss the volume of oil transportation or export abroad, the CPC deserves priority," Tokayev emphasized.
It is worth noting that the CPC pipeline primarily transports oil from the Caspian offshore Kashagan and onshore Karachaganak fields through Russia to the Black Sea terminal of Novorossiisk. This pipeline handles approximately 80 to 90 percent of Kazakhstan’s total oil shipments, with a capacity of around 1.4 million barrels per day before a temporary reduction in capacity following a drone attack in February 2022.
Kazakhstan is actively exploring alternative routes for oil transportation to diversify export routes and reduce dependency on Russia-based transit options. Specific alternative routes are yet to be detailed, but there is an increasing focus on ensuring Kazakhstan's oil can reach markets outside of Europe via Russia, indicating strategic diversification.
One emerging route includes shipping Kazakh CPC crude blend to U.S. West Coast destinations using maritime transshipment hubs such as Panama. For instance, a Greek-owned Suezmax tanker carried about 1 million barrels of Kazakh CPC crude via Panama’s Pacific Terminal, representing a novel route to diversify export destinations beyond traditional Black Sea and European markets.
As Kazakhstan ramps up production, there is an expectation of a 30–40 percent increase in oil volume transported via the CPC. However, alongside this growth, Kazakhstan is also exploring other export corridors to mitigate geopolitical risks and increase market reach.
In summary, while the CPC pipeline remains the primary oil export route for Kazakhstan due to its volume and strategic value, the country is actively pursuing alternative routes like maritime transshipment to new markets like the United States, to diversify and secure its oil export infrastructure against regional geopolitical risks.
- Tokayev highlighted Kazakhstan's ongoing efforts to find alternative routes for oil export, noting the potential of shipping Kazakh CPC crude blend to U.S. West Coast destinations using maritime transshipment hubs like Panama.
- With a growing focus on reducing dependency on Russia-based transit options, Kazakhstan is actively exploring other export corridors, such as the Baku-Tbilisi-Ceyhan pipeline and the Middle Corridor, for diversifying oil transportation routes.
- By pursuing alternative routes like maritime transshipment to new markets like the United States, Kazakhstan aims to secure its oil export infrastructure against regional geopolitical risks, ensuring a stable and successful future in the oil-and-gas industry and finance, and expanding its business partnerships in the energy sector.
