         2009 |
Kazakhstan Seeks to Expand Oil Outlets By GUY CHAZAN WSJ 2/18/09 LONDON -- The oil-rich Central Asian nation of Kazakhstan urgently needs more export capacity to cope with a big uptick in its oil production over the next decade, a senior Chevron executive said. A rare bright spot in the global energy industry, Kazakhstan is expected to nearly double oil output by 2020, becoming one of the world's top 10 crude producers. But the landlocked country has few viable export outlets, with the bulk of its oil passing through Russia. "With Kazakhstan expected to add a minimum of over 1.5 million barrels a day of production over the coming 15 years, it needs new, dedicated and reliable export capacity, and it needs it urgently," Ian MacDonald, Chevron's vice president of business development and transportation, told an oil conference. He said Kazakhstan needs additional export pipelines with a capacity of one million barrels a day. In an attempt to meet that need, authorities are working on an ambitious new export route, the Kazakhstan Caspian Transportation System, which would pipe oil from the west of the country to a new port on the Caspian Sea and shipping it to Azerbaijan for onward delivery to Turkey. But the project, which preliminary estimates say could cost $3 billion, is still at an early stage, and many doubt it will be ready by 2013 as planned. Even so, the launch of Kashagan, a supergiant field in the Kazakh sector of the Caspian Sea that will substantially boost production volumes, comes onstream in 2012. Kashagan, the biggest oil discovery of the past 30 years, is the only large oil project of its kind without a dedicated export pipeline. Two other big fields, the Chevron-led Tengiz and Karachaganak, are also set to expand production in coming years. Currently, Kazakhstan has two main pipelines -- the Chevron-led Caspian Pipeline Consortium, which runs across southern Russia to the Black Sea port of Novorossiisk, and the Atyrau-Samara line, which also flows to Russia. Plans are to double CPC's capacity by 2013, and Atyrau-Samara also will be expanded. Even then, Kazakhstan will have just more than one million barrels a day of pipeline capacity, so about 400,000 barrels a day will have to be moved by rail or tanker -- costly options oil companies tend to avoid. Write to Guy Chazan at guy.chazan@wsj.com |