From Baku, oil can reach international markets via the Baku–Tbilisi–Ceyhan (BTC) pipeline, which crosses Azerbaijan, Georgia and Turkey to the Mediterranean.
The BTC pipeline was built to carry oil from Azerbaijani oilfields, offshore but on the West of the Caspian Sea, to international markets.
Oil and gas companies in Kazakhstan are showing a reluctance to provide annual volume commitments, says Semurg Invest, the project developer and operator of Kuryk port. This includes Shell, Chevron, ExxonMobil, ENI and Inpex. The terminal could be built with under $100m investment. If the companies would commit to using the terminal it would encourage others to invest.
Currently, about 80 per cent of Kazakh oil reaches international markets via the Caspian Consortium Pipeline, which runs through Russia to the Black Sea port of Novorossiysk, which is under 100 miles from Crimea. Oil and gas companies in Kazakhstan need to pay Russia to transport their oil. All Kazakh exports to the west go through Russia via various routes.
This exposes them to the possibility of war related disruption. During 2022, Russia began disrupting flows through the pipeline. It cited technical and regulatory issues. The disruption was interpreted by many experts as a warning from Russia that Kazakhstan should stay silent about the war or face economic disruption, according to news reports.
Oil sales account for 60 per cent of Kazakhstan's export revenue and a fifth of the country’s GDP. Kazakhstan is keen to increase the country's export capacity through the Caspian Sea to 400,000 barrels a day / 20m metric tons per year. The BTC pipeline has a capacity of 1.2m barrels a day.
The first part of the project at the Kuryk port is to build a grain terminal, expected to be operational by early April 2023. This will provide a route for grain out of the region to Middle Eastern and African countries. The terminal already has rail links and power supplies.
In December 2022, UAE based port operator AD Ports Group signed an agreement to set up a joint venture with KMTF (Kazmortransflot), a offshore logistics and services subsidiary of the Kazakh National Oil Company (KazMunayGas). The joint venture will operate offshore vessels and tankers, including in the Caspian Se. It will be 51 per cent owned by AD Ports Group.