KARACHAGANAK EXPORT ROUTES PONDERED.

Publication: Monitor Volume: 4 Issue: 176

Kazakh President Nursultan Nazarbaev completes today an official visit to Italy, during which he reviewed progress on a giant natural gas project with ENI-Agip. The contract with the Italian company, signed last year, envisages US$2 billion worth of investments to develop parts of the Karachaganak gas field, one of the world’s largest. The Italian concession area is expected to produce 12 million tons of gas condensate annually before 2005. The priority issue at the moment involves the choice of the export route.

Nazarbaev and the ENI-Agip management discussed four possible routes: (1) via Russia, piggybacking on the planned Tengiz-Novorossiisk oil pipeline (a project that has failed to start in the six years since the consortium was formed); (2) via Azerbaijan and Georgia, in conjunction with the planned trans-Caspian and Baku-Supsa pipelines; (3) piggybacking on the planned Main Export Pipeline (MEP) for Caspian oil from Baku to Turkey, involving Azerbaijan and Georgia as transit countries once more; and (4) via Iran to the Persian Gulf.

Nazarbaev and the Italian management were cited as agreeing that the Iranian route would be more cost-effective than the other routes. However, the start of construction of MEP seems at hand. In recent days, Azerbaijan, Georgia and Turkey have signed agreements of intent on this project, in anticipation of the October 9 meeting of the international consortium. That meeting is set to announce the choice of the Baku-Georgia-Turkey route as the main export route for oil from Azerbaijan (International agencies, September 23-24).–VS

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