Friday, July 23, 2010

Need for Trans Caspian Pipeline

Tengiz at Night
Eurasian oil and gas reserves are landlocked: unable to reach the world markets without the assistance of neighboring states. In Kazakhstan's case, that help has not been forthcoming.
According to the New York Times, the Russians built the Caspian Pipeline Consortium pipeline through Russian territory to the Black Sea to carry oil from the Tengiz oil field. The pipeline carries 420,000 barrels a day, but planners had anticipated sending 600,000 bpd. The pipeline capacity won't allow any additional oil to pass through, and the Russians refuse to expand the pipeline. (The Russian pipeline company Gazprom is a private company, but the Russian government is the primary shareholder. The government is insisting that private equity needs to be found to expand pipeline capacity.) The American oil company Chevron operates the Tengiz field, and have drilled 107 wells. Nine remain idle, since there is no way to market any additional oil.
The newspaper reports that another oil field, whose partners include Exxon Mobile, Shell, ConocoPhillips, Total and Eni, also lacks any way to deliver its oil to market. (Kramer, Andrew E. "In Asia, a Gulf's Worth of Oil Awaits Transport," NY Times, 22 July 2010)
There has long been a proposal for a pipeline across the Caspian Sea to Baku. Such a pipeline would allow Kazakh oil (and a separate pipeline would allow Turkmen gas to traverse the waterway) to link with the Baku to Ceyhan pipeline. This would give Kazakhstan a direct link to world markets.

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