New horizons of Baku-Almaty gas cooperation

Kazakhstan's idea to supply liquefied natural gas (LNG) to Europe through the territory of Azerbaijan can be realized by using the capabilities of the Baku-Tbilisi-Kars railway or already existing and constructed facilities within the Southern Gas Corridor project, the experts told the correspondents of Vestnik Kavkaza. At the same time, they warned that a large-scale implementation of this idea requires a special infrastructure necessary for working with LNG in both countries.

Chief editor of the Trend information agency, Seymour Aliyev, explained Kazakhstan's desire to deliver gas to Europe via Azerbaijan by three reasons. "The Azerbaijani route of transportation from Kazakhstan was chosen due, first, to the fact that Astana has been using this reliable route for many years, and second, the use of this route will allow loading one of Kazakhstan's major infrastructure projects abroad - the Batumi port along Georgia's Black Sea coast, Third, this is an additional delivery direction, resulting from the policy of diversification of routes," he noted.

Seymour Aliyev drew attention to the fact that the experience of LNG supplies to Azerbaijan already exists, but the opportunities for implementing the new project will depend on its scale. "The investments in this project will depend on the volume of transportation. It should be recalled that gas was transported through Azerbaijan in tanks using ferries. With a significant increase in volumes and increased economic efficiency it is possible to consider the issue of creating the appropriate infrastructure - LNG terminals, special vessels for transportation through the Caspian Sea," the chief editor of the Trend information agency stressed.

In his estimation, Azerbaijan will support such a proposal of Kazakhstan. "Azerbaijan is interested in increasing the volume of cargo transportation via its territory, including the East-West corridor. And the Baku-Tbilisi-Kars railway, which allows to export all types of cargo by railway directly to Europe or Mediterranean coast of Turkey, is part of this route," Seymour Aliyev said.

Political scientist Rovshan Ibragimov, in turn, drew attention to the long-term nature of Kazakhstan's plans to organize LNG supplies through Azerbaijan. "The fact is that LNG requires expensive LNG terminals not only in Kazakhstan, but also in Azerbaijan, but both countries don't have such infrastructure. In general, gas will be liquefied in Kazakhstan, converted back to gas in Azerbaijan and will be exported to European markets through pipelines of the Southern Gas Corridor. It should be noted that now this pipeline, intended primarily for the export of natural gas from Shah Deniz, is not able to transport additional volumes of gas," he said.

The expert also explained Kazakhstan's desire to open a new way of supplying hydrocarbons through Azerbaijan by the need for export diversification. "There is obvious political and economic need for diversification of supplies. It should be emphasized that diversification and the formation of alternative export routes to foreign markets is the number one task for landlocked states. Kazakhstan offered Azerbaijan a program that will be discussed by the countries in the future," Rovshan Ibragimov said.

The head of the Central Asia Department of the CIS Institute, Andrei Grozin, estimated LNG supplies through Azerbaijan as new opportunities for Kazakh exporters. "Most likely, LNG will be delivered to Azerbaijan by a tanker fleet, which means new logistics and new technological solutions for Kazakhstan's port facilities in the Caspian. According to geological data, Kashagan is more of a gas project than an oil one, which means that in the next decade Kazakhstan will have significant amounts of gas in the Caspian Sea that cannot be pumped into the reservoir to maintain pressure or simply burn," he pointed out.

"Due to huge amounts of gas, the question will arise of where should they put it. Although the capacity of the Caspian Pipeline Consortium will increase in the future, it will not be able to absorb all Kashagan gas, and the Kazakh Energy Ministry also does not exclude the possibility of a general increase in the country's gas production. The new gas could be supplied by a pipeline to China, but its capacity is also limited, and most importantly, China does not see a need for a sharp increase in gas consumption. So, Kazakhstan still has to look for new gas delivery routes. LNG with delivery to Europe via Azerbaijan could be one of such routes. That is, in my opinion, Kazakhstan is investing in tomorow," Andrei Grozin stressed.