Kazakhstan is in discussions to resume crude oil exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline to the Turkish Mediterranean coast after supply was interrupted last month due to organic chlorides found in Azeri oil on the pipeline, Kazakhstan’s Energy Minister Yerlan Akkenzhenov said on Wednesday.
Kazakhstan’s top oil official confirmed for the first time that there had been disruption to oil supply via the pipeline and that deliveries were halted.
Kazakhstan, an oil producer part of the OPEC+ group, has decided to reroute flows away from BTP after supermajor BP, operating the pipeline in Azerbaijan and Georgia, reported at end-July there were issues with organic chloride contamination of Azerbaijani oil, Russian business daily Vedomosti reported earlier this month.
The clean-up of the pipeline from the tainted oil was nearing completion last week.
Now Kazakhstan’s energy minister Akkenzhenov admitted there was a halt to supply.
But Kazakhstan’s national oil and gas company KazMunayGas is negotiating the resumption of deliveries along this route, Akkenzhenov was quoted as saying by Russian news agency TASS.
The BTC pipeline has a large throughput capacity which allows for an increase in crude supply if shippers are interested, the minister added.
In July, Kazakhstan and Turkey discussed a potential increase of Kazakh oil exports via the BTC pipeline to Turkey during the visit of Kazakhstan’s President Kassym-Jomart Tokayev to Ankara.
Kazakhstan raised its oil exports via BTC by 12% to about 785,000 tons, or about 34,000 barrels per day (bpd), in the first half of the year.
For landlocked Kazakhstan, raising oil exports via the BTC pipeline to Turkey’s Mediterranean port of Ceyhan would lead to higher volumes, circumventing the biggest export route out of the country—pipelines to Russia’s ports on the Black Sea and the Baltic Sea.
Meanwhile, Kazakhstan appears to continue to prioritize national interest to complying with its OPEC+ quota.
Kazakhstan reduced its oil production by 36,000 bpd in July, per OPEC’s latest monthly report. But the July output level of 1.827 million bpd was way above its ceiling of 1.514 million bpd in the OPEC+ deal.
By Michael Kern for Oilprice.com
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