Giant Kazakh oilfield may use Baku-Ceyhan route

/REUTERS, Baku, Lada Yevgrashina, April 18, 05/ - Oil from Kazakhstan's giant Kashagan field may reach European markets via a $3 billion link to the Baku- Tbilisi-Ceyhan (BTC) pipeline, the head of Azeri state oil firm SOCAR, Natik Aliyev, said on Monday. The plan under discussion by Azerbaijan and Kazakhstan, which has agreed to buy 8.34 percent of Kashagan, would secure an export route for the field by 2010, via the Turkish port of Ceyhan. "In 2010 Kazakhstan plans to begin transporting half a million barrels of oil a day from the Kashagan field through the Baku-Ceyhan pipeline, rising to one million barrels per day," Aliyev told reporters during a break from two days of talks with Kazakh state oil firm KazMunaiGas. "To guarantee this volume we have to build infrastructure and increase the capacity of the pipeline itself. These are the issues we are discussing." The pipeline project is led by Britain's BP Plc, which has a 30.1 percent stake. SOCAR has 25 percent and smaller stakes are held by Unocal, Statoil, TPAO, Itochu, Amerada Hess, ENI, ConocoPhillips, Inpex and Total. The latter four are shareholders in both Kashagan and the Baku-Ceyhan pipeline. Linking the Kashagan field to Baku would involve building a 700 km (435 mile) pipeline, equipping the Kazakh port of Atyrau with a new million-barrel-per-day terminal and creating a shipping system to take the oil across the Caspian Sea. Aliyev said Kazakhstan planned to build 5 tankers with a capacity of 60,000 tonnes each, almost five times bigger than the 13,000 tonne tankers currently available. The Baku-Ceyhan pipeline is scheduled to come on stream later this year, with a capacity of one million barrels per day. "To guarantee the transport of Kazakh volumes along the BTC, the pipeline will have to be widened. Research has been done that makes us confident we can practically increase the throughput to 1.7 million barrels per day," Aliyev said. The head of KazMunaiGas, Kairgeldy Kabyldin, said Kazakh producers saw the pipeline as the main export route, but there were legal questions that remained to be ironed out. ((Reporting by Lada Yevgrashina, writing by Tom Miles; editing by James Jukwey; tom.miles@reuters.com; Reuters messaging: tom.miles.reuters.com@reuters.net; Phone: +7 095 775 1242)) [2005-04-18]