Caspian States Sign Pipeline MOU
Azerbaijan, Georgia and Turkey signed a memorandum of understanding (MOU) with Kazakstan on March 1st covering the transport of oil through a proposed East-West pipeline and clarifying investments terms for companies backing the project.
Azerbaijan, Georgia and Turkey favor the construction of a Baku-Ceyhan pipeline to diversify export routes from the Caspian basin and to reduce dependence on Iran and Russia.
The U.S. has also been pushing for the project, and U.S. special presidential envoy on Caspian energy issues, Elizabeth Jones, also signed the agreement on March 1st. But, Kazakstan’s support for the project is considered most crucial, as it is potentially the largest Caspian producer and securing its oil for the pipeline would give the project a major jumpstart.
Valekh Aleskerov, director of foreign investment for Azeri state oil company SOCAR, said after a meeting with Kazak Prime Minister Kasymzhomart Tokayev that Astana had not committed to anything.
He said that: “Kazakstan as a government is not expected to make any specific commitments on any specific volumes of oil. Like any other oil-producing country, Kazakstan is interested in having alternative routes.”
Aleskerov added that: “As for the question of joining or not joining the project, this is a matter for companies producing oil in Kazakstan.”
He indicated that the central concern of the MOU was to ensure that Astana had legislation to allow foreign companies producing in the country to invest in the Baku-Ceyhan pipeline and that the agreement did not have any impact on the economic viability of the project.
Two of the largest producers working in Kazakstan – BP Amoco and Chevron Corp. – have expressed support for the pipeline project.
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