Thursday, 11 November 2010

Caspian oil and gas exports expected to show steady rise

A report by the International Energy Agency (IEA) has estimated that natural gas exports from the Caspian region will more than triple in the next decade. Producers including Turkmenistan and Azerbaijan are expected to export almost 100 billion cubic metres of gas in 2020, compared with less than 30 billion last year. Caspian producers already ship gas to China through the TransAsian pipeline, which runs from Turkmenistan, Kazakhstan and Uzbekistan.

Speaking at a conference in New York, Kazakhstan's Oil and Gas Vice Minister Asset Magauov said that Kazakhstan plans to ship 5 billion cubic metres to China this year, increasing to 14 billion cubic meters annually from 2014.

Caspian's “export potential may be much higher than we forecast,” said IEA's Chief Economist Fatih Birol, saying there is a lot of potential for the region to cut domestic energy consumption. Caspian gas is also a possible source for the Nabucco pipeline through Turkey, which would enable Europe to be less dependent on Russian fuel.

The region's oil output is also expected to rise, with Kazakhstan ranked fourth in the world for production growth in volume terms between now and 2035. According to Magauov, Kazakhstan plans to export about 12 million tons of crude to China next year, while also raising gas production to 60 billion cubic metres in 2015 up from 32.2 billion cubic metres last year.

The IEA estimates that the region's crude output will peak at about 5.4 million barrels a day between 2025 or 2030.

Source: Bloomberg

For more news and expert analysis about the Caspian region, please see Caspian Focus.

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