The state-run oil and gas firms of Azerbaijan and Kazakhstan have signed agreements to facilitate trans-Caspian transportation and export of Kazakhstan’s growing oil production.
SOCAR and Kazmunaigaz plan to expand existing cooperation in order to ensure that additional Kazakh oil volumes can be exported via the Caspian Sea and across Azerbaijani territory onward to world markets. The agreements should iving Kazakhstan additional clarity on exports of future oil production while ensuring Azerbaijan’s prime transit role in the export of this growing output.
Agence-France Presse reported that one agreement called for the two companies to “study the opportunity to jointly build a new pipeline from the Caspian coast near Baku to the Black Sea coast for the transit of Kazakh oil through Azerbaijani territory.”
Mention of construction of a trans-Caspian pipeline, be it to carry oil or gas, is likely to rile both Russia and Iran, the two Caspian littoral states that have objected to any subsea pipelines on environmental grounds and have the most to lose in terms of economic leverage, transit tariffs, and political influence over east Caspian producers in any direct pipeline link across the sea.