Wednesday, 28 September 2022 12:39

Azerbaijan and Kazakhstan expanding cooperation

Multifaceted cooperation 

Last summer was marked by the intensification of cooperation between Azerbaijan and Kazakhstan. For Kazakhstan having no direct access to the open sea, Azerbaijan, with its developed export infrastructure, is one of the main trading partners, given the geographical proximity and long-standing friendly relations between the two countries.

After meeting with the President of Kazakhstan Kassym-Jomart Tokayev in Baku on August 24, President of Azerbaijan Ilham Aliyev announced the strengthening of cooperation between the countries, noting that Azerbaijan and Kazakhstan have similar positions on international issues.

The parties signed 20 documents during the official visit of the President of Kazakhstan to Baku, among which the main are:

- The declaration on strengthening strategic relations and deepening allied interaction between the Republic of Kazakhstan and the Republic of Azerbaijan.

- The comprehensive program for the development of cooperation between the Republic of Azerbaijan and the Republic of Kazakhstan for 2022–2026.

- The agreement on trade and economic cooperation between the Government of the Republic of Azerbaijan and the Government of the Republic of Kazakhstan.

Earlier in June, the negotiations, held in Baku within the framework of the Kazakhstan trade and economic mission, resulted in signing of 8 export contracts worth more than $38 million, says the data of the Ministry of Trade of the Republic of Kazakhstan.

To date, more than 80 Kazakhstani companies are permanent exporters of their products to Azerbaijan.

Besides, there is a potential to increase exports from Kazakhstan by 105 commodity items worth $272 million, including metallurgical products, food and beverages, products of the engineering and chemical industries.

Since the beginning of this year, twice as much cargo has been transported through the commercial ports in the Caspian Sea than in the same period of 2021. It is expected that the volume of shipments on the trans-Caspian route will increase sixfold by the end of this year.

The trade turnover between Kazakhstan and Azerbaijan in 2021 amounted to $332.2 million, which is 3 times higher than in the same period of the previous year ($109.2 million).

The 2021 exports from Kazakhstan to Azerbaijan increased 3.4 times and amounted to $287.9 million. Imports to Kazakhstan from Azerbaijan increased by 77.3% and amounted to $44.4 million in 2021.

 

Ro-Ro

On July 7, the day after the information about the month-long suspension of the Caspian Pipeline Consortium (CPC) operation came out, President of Kazakhstan Kassym-Jomart Tokayev called the diversification of oil supplies an important task. In this regard, he ordered to work out the best option for the implementation of the Trans-Caspian route and increase the capacity of two oil pipelines, the press service of Akorda reports.

«The priority direction is the Trans-Caspian route. I task KazMunayGas to work out the best option for its implementation, including the possibility of attracting investors of the Tengiz project. The Government, together with Samruk-Kazyna, should take measures to increase the capacity of the Atyrau—Kenkiyak and 

Kenkiyak—Kumkol oil pipelines», Tokayev said on the July 7 meeting dedicated to the development of the transport and transit potential.

Tokayev also tasked to turn the ports of Kazakhstan into the leading hubs of the Caspian Sea.

“I set a strategic task for the government — to transform our ports, turning them into one of the leading hubs of the Caspian Sea. Conceptually, I agree that it is necessary to strengthen the maritime fleet and create a container hub in the port of Aktau”, Kassym-Jomart Tokayev said.

He also noted that Kazakhstan «has never been a maritime country and therefore has not fully utilized the possibilities of the sea transportation». However, now, the President stressed, is another time. Following this order, Kazakhstan plans to export five million tons of oil through Azerbaijani pipelines. This was reported by the Reuters agency on August 12. Of these, Kazakhstan is going to export 1.5 million tons of oil via the Baku - Tbilisi - Jeyhan pipeline. The national company «KazMunayGas» is negotiating with the Azerbaijani state company SOCAR.

If the parties come to an agreement, Kazakhstan will be able to ship about 30 thousand barrels through the pipeline to the Turkish Mediterranean port of Jeyhan. “According to the two sources, another 3.5 million tons of Kazakh oil per year may begin to flow through another Azerbaijani pipeline to the Georgian Black Sea port of Supsa in 2023”, the agency reported.

The total volume of exported Kazakh oil may reach more than 100 thousand barrels per day. This makes 8% of the volume transported by the Caspian pipeline. 1.3–1.4 million barrels per day run through the Caspian Pipeline Consortium (CPC) connecting the fields in western Kazakhstan with the port of Novorossiysk in the Black Sea. The difficulty of an alternative route through Azerbaijan is that Kazakhstan will have to rely on small tankers to transport oil, given the specifics of the Caspian Sea.

A permanent ferry service has been established between the ports of Aktau and Baku (Azerbaijan). Railway ferries and Ro-Ro vessels transport petroleum products, goods, grain and mineral fertilizers, covering 253 nautical miles in 18-20 hours. Ferries can accommodate up to 54 railway cars and 35 heavy-duty vehicles.

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