Azerbaijan and Kazakhstan are currently negotiating an increase in the transit of Kazakh oil through Azerbaijan, aiming for a target of 5-7 mn tonnes, Reuters reported citing an official from Azerbaijan's state-owned oil company, SOCAR. This move is part of Kazakhstan's broader strategy to reduce its reliance on Russian energy export routes.
"Negotiations are underway with our Kazakh counterparts to boost oil transit from Kazakhstan to 5-7 mn tonnes," stated Zaur Gakhramanov, an adviser to the president of SOCAR.
This development follows Kazakhstan's efforts to diversify its export pathways, given that a substantial portion of its 1.5 mn barrels per day output—equivalent to 1.5% of global supply—currently transits through Russian pipelines.
A key element of this plan is the impending opening of an oil terminal in Dubendi, near Baku. Scheduled for completion this summer, the terminal's reconstruction will enable it to handle up to 10 mn tonnes of oil annually. This expansion will enhance Azerbaijan's overall transit capacity, which is expected to rise to 20-25 mn tonnes per year.
In the previous year, Kazakhstan transited 1.4 mn tonnes of oil through Azerbaijan. This figure is set to increase to between 1.7 and 1.8 mn tonnes this year, with projections reaching 2.2 mn tonnes by 2025, according to SOCAR.
An agreement signed in March between SOCAR and Kazakhstan's KazMunayGas aims to incrementally increase the volume of Kazakh oil transported via Azerbaijan's Baku-Tbilisi-Ceyhan (BTC) pipeline system to 2.2 mn tonnes. Additionally, discussions are ongoing regarding the potential transport of 5 mn tonnes of Kazakh oil through the Baku-Supsa pipeline in 2023.
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