Publication: Eurasia Daily Monitor Volume: 3 Issue: 99

Russia has secured renewed pledges of allegiance from Kazakhstan, its “most reliable partner” in Central Asia. Speaking after talks with Russian President Vladimir Putin in Russia’s southern Black Sea resort of Sochi on May 20, Kazakh President Nursultan Nazarbayev said a strong Russia was important for its partners and allies. Practicing an apt bestowal of praise, Nazarbayev cited Putin’s recent state of the nation address. You discussed “urgent issues of the country’s security, demography, and the social situation,” he told Putin (RIA-Novosti, May 20).

Putin and Nazarbayev signed an agreement to transfer the Commonwealth of Independent States (CIS) chairmanship from Russia to Kazakhstan. In this new capacity, Nazarbayev hailed the grouping’s past achievements and seemingly disregarded the current uncertainty over its future. “The CIS played the greatest role during the Soviet collapse, and all honest people should be grateful [to the CIS] that we went through the process… of gaining independence without major bloodshed between the republics,” he said (RIA-Novosti, May 20).

Apart from the largely symbolic CIS chairmanship, the Kremlin offered Astana other geopolitical incentives as well. The Kremlin has reiterated a special relationship with Kazakhstan. Nazarbayev, described by Putin’s foreign policy adviser Sergei Prihodko as a “most reliable partner” (Interfax, May 19), is the only post-Soviet leader invited to attend the G-8 summit in St. Petersburg in July 2006.

However, Russian officials were careful not to offend their other former Soviet partners, noting, “We will invite Kazakh President Nursultan Nazarbayev to attend the G-8 summit not as the president of a country but as the CIS chairman,” Putin’s advisor Igor Shuvalov explained. Nazarbayev will join leaders from India, China, South Africa, Brazil, and Mexico, along with the heads of several international organizations at the G-8 summit, he added (Itar-Tass, May 16).

In return, Nazarbayev thanked Putin for agreeing to attend a June summit in Almaty on confidence-building and regional cooperation. The Almaty summit guest list includes leaders of 16 countries and observers from five more (Interfax, May 20). Following the Almaty summit, Nazarbayev and Putin will go to the Baikonur cosmodrome in Kazakhstan, to watch a Russian rocket carry the first Kazakh satellite into space. “In addition, Kazakhstan is building a new launch pad for a new, more environmentally friendly, missile system now being developed in Russia,” Nazarbayev noted (Interfax, May 20).

After the Sochi meeting, Putin said the two countries had made progress in energy and security cooperation since the leaders’ April meeting in Moscow. “We agreed on military-technical cooperation, including the possible expansion of Russian military equipment imports by our Kazakh partners” (Interfax, RIA-Novosti, May 20).

Nazarbayev pledged to “double the trade turnover from $10 billion, taking into account work on the new joint deposit in the Kurmangazy region in the Caspian.” Furthermore, “A joint venture on parity basis will be operating there, and the reserves are estimated at one billion tons of oil,” Nazarbayev said.

Putin announced that the two countries had clinched several energy deals. “Our specialists agreed on joint production, processing, refining, and marketing of Kazakh gas,” he said. “An agreement on gas prices also has been reached, quite a difficult part of the negotiations until now,” Putin added (Interfax, May 20). However, the Russian leader disclosed no details, saying only that Kazakh gas supplies to Russia would be “comparable” with gas production at a major gas field.

Gazprom now reportedly imports 8 billion cubic meters (bcm)/year of Karachaganak gas for the Orenburg plant. However, members of the Karachaganak Petroleum Operating (KPO) international consortium have been uneasy with the low prices offered by Gazprom. Subsequently, Gazprom has pledged to launch the Karachaganak gas joint venture to as much as 15 bcm a year of gas from Karachaganak, but the gas giant is yet to deliver on its pledges.

Given Gazprom’s slowness to offer more competitive terms, Kazakhstan’s national oil and gas company (KazMunayGaz) and the China National Petroleum Company have pledged to jointly draft a feasibility study for the construction of a 30 bcm/year gas pipeline from Kazakhstan to China. Kazakhstan is also considering a project suggested by the Chinese government to build a gas pipeline along the Atasu-Alashankou route.

Putin noted that progress has been made in implementing agreements on customs tariffs. “This is very important for our Kazakh partners and it is also instrumental for increasing the volume of Russian railway freight,” Putin said (RIA-Novosti, May 20). Nazarbayev said Kazakhstan and Russia had, for the first time, reached an agreement on container cargo transportation from China to Europe via Kazakhstan and Russia. The two countries also have new customs arrangements for exports of Kazakh grain to Belarus via Russia and for the coal trade (Interfax, May 20).

In April Russia and Kazakhstan agreed to more than double crude oil deliveries via the Baku-Novorossiysk pipeline owned by the Caspian Pipeline Consortium (CPC). Nazarbayev said that crude shipments via the CPC would be increased from the current 28 million a year up to 67 million metric tons eventually.

Kazakhstan appears to remain interested in the Baku-Tbilisi-Ceyhan (BTC) pipeline, as well as other projects potentially detrimental to Moscow’s interests. The Kazakh government is still considering a draft agreement to join the BTC, the governmental press service said (Kazinform, May 20). Thus despite Astana’s official pledges to focus on the CPC, Kazakhstan appears to remain reluctant to abandon transit opportunities offered by the BTC.

Astana has recently expressed interest in a yet another pipeline project, this one transiting the Caspian seabed, according to Foreign Minister Kasymzhomart Tokayev (RIA-Novosti, April 21). Moscow, however, has long resisted attempts to bypass its pipelines via a sub-sea route from Central Asia across the Caspian.

However, on the eve of the Sochi summit, Tokayev conceded that sub-sea pipelines across the Caspian seabed could be built on a consensus basis only. “Construction of a gas pipeline across the Caspian seabed requires the agreement of all littoral states,” he said. Tokayev also said that a convention on the Caspian division should precede any sub-sea pipeline projects (Interfax, May 19). In other words, Kazakhstan agreed with Russia’s right to veto the pipeline project across the Caspian seabed.