Baku: As in Azerbaijan, the oil and gas sector is the main pillar of economic development in Kazakhstan, said Assilbek Dzhakiyev, head of PetroCouncil.kz, during his speech at the 2nd Caspian and Central Asia Oil Trade and Logistics Forum held in Baku, APA-Economics reports.

According to Azeri-Press News Agency, Dzhakiyev highlighted that though the oil and gas sector officially accounts for more than 20% of Kazakhstan's GDP, independent assessments suggest this figure exceeds 35%. He outlined Kazakhstan's ambitious goal to produce 100 million tons of oil annually by 2030, solidifying its position among the world's top 10 oil and gas producers. The country's primary oil fields are situated in western Kazakhstan, along the Caspian Sea coast.

Over the past three decades, Kazakhstan has focused on upstream projects, but attention is now shifting towards downstream projects, with significant involvement of Chinese companies. The total value of upcoming projects in this sector over the next five years is projected to be $15 billion. These include a $7.6 billion initiative to produce 1.2 million tons of polyethylene annually and a $1.1 billion project aimed at producing 900,000 tons of butadiene.

Dzhakiyev emphasized that the Middle Corridor, which runs through China and Azerbaijan, will be a primary route for transporting these products. The northern route is expected to remain limited over the next 5-10 years. Kazakhstan's abundant 'sour gas' reserves will be utilized in the petrochemical industry, with most projects located in the Atyrau region, about a 50-minute flight from Baku.

Currently, 80% of Kazakhstan's oil is exported via the Caspian Pipeline Consortium, underscoring the need for diversified logistics. The target is to transport 3 million tons of oil annually via the Caspian Sea, but infrastructure constraints, such as the need for additional pipelines and expansion of Aktau port capacities, present challenges. An estimated $3 billion investment is required to address these needs.

Dzhakiyev noted that developing the Baku-Tbilisi-Ceyhan pipeline and the Caspian route is a priority. A key consideration is the blending of Kazakhstan's heavier oil with Azerbaijan's lighter oil. In terms of transportation costs, the CPC pipeline is the most economical at approximately $36 per ton, compared to the Baku-Tbilisi-Ceyhan route, which costs around $90 per ton. This cost difference impacts the economic efficiency of projects.

Following the Russia-Ukraine war, Kazakhstan is actively discussing the future prospects of the Caspian route, Dzhakiyev concluded.