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Kazakhstan ratifies oil transit treaty with Azerbaijan

Kazakhstan has ratified a treaty with Azerbaijan allowing Kazakh crude to be pumped through a pipeline linking Azerbaijan’s Caspian coast to Turkey’s Mediterranean coast, the presidential administration said.

Kazakh President Nursultan Nazarbayev signed a law on Thursday ratifying the treaty on the Baku-Tbilisi-Ceyhan pipeline. The treaty provides for the creation of a new system to carry Kazakh oil across the Caspian Sea to Azerbaijan, to be put through the BTC pipeline.

The 1,700-kilometer (1,000-mile) pipeline, expected to start operating at full export capacity of 1.6 million bbl/d in 2013, pumps crude from Azerbaijan’s oil fields off the Caspian coast via Georgia to Turkey, and on to Western markets. May 28 was the second anniversary of the pipeline’s first oil reaching Turkey’s Mediterranean port of Ceyhan, and the BTC is now transporting 1 million barrels per day. Under the project, a 730-km section is to be built on Kazakh territory from Eskene to Kuryk and from Kuryk to Baku (Azerbaijan’s capital) across the Caspian Sea, with a link to the BTC system.

Russia has claimed that the pipeline is aimed at weakening Moscow’s influence in the region, regarding it as an “anti-Russian” project. The pipeline’s shareholders are BP (30.1%), Azerbaijan BTC (25%), Chevron (8.9%), Statoil (8.71%), TPAO (6.53%), Eni (5,00%), Total (5%), Itochu (3,4%), INPEX (2,5%), ConocoPhillips (2,5%) and Hess (2,36%). (