Business & Economy

Kazakhstan expands oil fleet to diversify routes

Astana, Sep 1 (EFE).- Kazakhstan is swiftly expanding its oil fleet to diversify export routes and reduce dependence solely on Russian pipelines that could be affected by Russia’s war in Ukraine.

“A month ago, the national shipping company Kazmortransflot (…) bought two oil tankers, ‘Liwa’ and ‘Taraz’, each with an 8,000-tonne capacity, to transport crude across the Caspian. We plan to acquire two more 80,000-tonne vessels for the Black Sea,” Erlan Akkenzhenov, Deputy Energy Minister, told EFE.

The tankers were procured using funds from the national company KazMunaiGaz and the AD Ports Group of the United Arab Emirates.

According to Akkenzhenov, these vessels “are being towed from Romania to the Caspian Sea.” They are expected to reach their destination by the end of September and will be operational by the fourth quarter of 2023.

Kazakhstan’s move stems from concerns that the Caspian CPC pipeline, which traverses Russian territory and extends to the Black Sea, might sustain damages due to the conflict in Ukraine. Currently, this pipeline serves as the primary export route for Kazakh crude.

Given its geographical location, Kazakhstan relies on neighboring countries for the transit of its exports. Consequently, the expansion of the Trans-Caspian International Corridor, the shortest transport route between Central Asia and Europe that bypasses Russia, becomes especially crucial. This corridor connects the Caspian Sea to the Black Sea, offering more prospects for Central Asia’s largest economy.

Besides the Caspian, Kazakhstan will use the Black Sea to ship its crude from the Russian port of Novorossiysk and Turkey’s Dzheykhan, deploying Aframax class tankers, which have a deeper draft.

“By the end of the year, we hope to expand our fleet to seven ships with the addition of two more Aframax tankers and one Suezmax,” of 160,000-tonne capacity, capable of navigating the Suez Canal, another route for Kazakh crude, the deputy minister explained.

However, he admitted that despite seeking alternatives, the Caspian CPC pipeline transporting oil to Europe via Russia “remains the most efficient and profitable route economically.”

“About 97% of Kazakh oil is supplied to the international market through Russia,” he noted, pointing out that the Caspian CPC carries “nearly 80% of Kazakhstan’s crude exports.”

This is a substantial volume, especially when considering that Kazakhstan’s annual crude production is around 90 million tonnes, according to Akkenzhenov.

The expansion of Kazakhstan’s oil fleet also has the backing of Western companies that own the majority of the oil extracted in the country. For instance, 75% of Tengiz oil belongs to American companies Chevron and ExxonMobil, a pattern observed in other oilfields. EFE



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