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Kazakhstan considers building $1 bln oil refinery in Georgia

Kazakhstan, the second-biggest oil producer in the former Soviet Union, may build an oil refinery at Batumi on the Black Sea, President Nursultan Nazarbayev told state-run Kazinform.

„The construction of the oil refinery at Batumi is a giant project, costing about $1 billion,” Mikhail Saakashvili, the president of Georgia, said today after talks with Nazarbayev, according to Kazinform. „The Caucasus corridor with access to Europe and Mediterranean becomes very important for us, Georgia is our active partner on this route,” Nazarbayev was reported as telling the news service. Kazakhstan bought half of a Georgian oil terminal on the Black Sea to boost crude exports from the landlocked country via routes that avoid neighboring Russia. KazTransOil, a unit of state-run KazMunaiGaz, agreed to form a joint venture with Batumi Oil Terminal to own and operate the Georgian Black Sea port, KazMunaiGaz said December 22. Kazakhstan exports most of its crude via the Chevron Corp. led Caspian Pipeline Consortium to a Russian Black Sea port. The country is diversifying its export options by building new links east to neighboring China to feed the world's fastest-growing major economy. The agreement will boost oil exports via the terminal by 25% next year to 15 million tons of crude and refined products, or about 300,000 barrels a day, KazMunai spokesman Mikhail Dorofeyev, said via phone in December. The Batumi port had relied on oil from Azerbaijan for most of its 120-year history. Most Azeri crude now, though, is sent to world markets via BP Plc's Baku-Ceyhan pipeline from the Caspian Sea and across Georgia to the Turkish Mediterranean. The Kazakh oil is shipped across the Caspian to Azerbaijan and sent by train to Batumi. Kazakhstan and Georgia plans to build this year a grain terminal in Poti port, to provide widen export from Kazakhstan via Caspian sea based Kazakh Aktau port and Azeri Baku port, Kazinform reports. (Bloomberg)