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    TransCaspian Gas Plan Revived

Summary

Baku and Astana have created two working groups on the issues of transportation of Kazakh oil and gas through Azerbaijan to world markets, the Kazakh energy minister Kanat Bozumbayev said December 7 after a meeting of an intergovernmental commission.

by: Dalga Khatinoglu; Ilham Shaban

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Natural Gas News, Asia/Pacific, Political, Intergovernmental agreements, Supply/Demand, Caspian Focus, Infrastructure, News By Country, Azerbaijan, Kazakhstan

TransCaspian Gas Plan Revived

Baku and Astana have created two working groups on the issues of transportation of Kazakh oil and gas through Azerbaijan to world markets, the Kazakh energy minister Kanat Bozumbayev said December 7 after a meeting of an intergovernmental commission.

"The volumes of Kazakh gas production will increase and Azerbaijan will be considered as export routes. As one of the options, we are considering the construction of an LNG plant in the west of Kazakhstan with the subsequent transportation of these products through Azerbaijan to the world markets,” Bozumbayev said. Most of Kazakhstan's gas comes from western regions.

The country began laying a pipeline to the east last year and launched a compression station, enabling the country’s eastern regions to be independent from Uzbek gas as well as to export 5bn m³/yr gas to China.

Kazakhstan is projecting a rise of 38% in demand to 18bn m³/yr by 2030, but the raw gas supply would increase by 2.5 times to about 110bn m³/yr by then. Last year, its raw gas production (including reinjection and flaring) stood at 46.33bn m³, of which 19.9bn m³ was commercial.

According to Bozumbayev, Kazakhstan has reached an agreement with Azerbaijan on the creation of an ad-hoc working group of representatives of relevant ministries and departments.

He did not elaborate on the initial costs of project and a source at Socar told NGW that only after a survey by a joint working group could it say anything about the feasibility of gas transit proposal.

SyEnergy founder Claudio Steuer, a UK-based energy consultancy, told NGW that exporting LNG or compressed natural gas (CNG) from the east of the Caspian Sea to Baku and ultimate delivery at Turkey’s Cehyan port was both feasible and competitive with some other suppliers like Algeria. 

In 2010, Italy's Eni started negotiations with Azerbaijan and Turkmenistan to supply 2-3bn m³/yr of gas from Turkmenistan as CNG to Baku and onward deliveries to the European Union by pipeline, but nothing has yet come of that. Earlier in December the European Commission said the EU would be receiving gas from Turkmenistan but did not explain how that would be done.

Bozumbayev said that the above-mentioned working group would study the project over the next few months and report to the two governments on the viability.  Azerbaijan can expand the initial capacity of Southern Gas Corridor (SGC), which stands at 16bn m³/yr for 2020, but the full capacity is designed to reach 31bn m³/yr by early 2030s.