Ex-Soviet republics Azerbaijan and Kazakhstan agreed Friday to develop plans for additional routes to deliver Kazakh oil to the Black Sea, including possibly a new pipeline.
During a visit by Kazakh President Nursultan Nazarbayev, Azerbaijani state energy company SOCAR and its Kazakh counterpart Kazmunaigaz signed a deal to "develop bilateral cooperation."
The two companies agreed to "study the opportunity to jointly build a new pipeline from the Caspian coast near Baku to the Black Sea coast for the transit of Kazakh oil through Azerbaijani territory," they said in a joint statement.
No details of the proposed pipeline were provided, including any potential route, which would need to involve a third country as Azerbaijan doesn't border the Black Sea.
The deal will also see the two companies cooperate on a feasibility study on building the so-called trans-Caspian system, which would create the infrastructure for Kazakhstan to significantly boost oil tanker shipments to Azerbaijan across the Caspian Sea. The oil would then be exported through the Baku-Tbilisi-Ceyhan pipeline, which runs from Azerbaijan through Georgia into Turkey.
The system's initial shipment capacity would stand at 500,000 barrels a day and will eventually rise to 750,000-1,200,000 barrels a day, the statement said.
Oil for the project would come from the vast Kashagan field off Kazakhstan's Caspian Sea coast, one of the largest discoveries of the past decade, which Kazmunaigaz says is expected to come online by 2012.
After a meeting with Nazarbayev, Azerbaijani President Ilham Aliyev said his Kazakh counterpart's visit would have "a positive affect on future bilateral relations.
"Azerbaijan and Kazakhstan actively cooperate in the international arena and have successful bilateral relations," Aliyev said in remarks shown on state television.
Azerbaijan and Kazakhstan, both rich in oil and gas, are seen as key to Western efforts to develop alternative export routes for Central Asian energy supplies in order to ease dependence on Russia, which currently controls the region's major export pipelines.