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Putin seeks closer energy cooperation with Kazakhstan

LONDON. March 20. KAZINFORM. Russian President Vladimir Putin met his Kazakh counterpart Nursultan Nazarbayev for talks centered on energy cooperation, as Kazakhstan presses ahead with plans to export oil through routes bypassing its giant neighbor. ”We analyzed the fulfillment of agreements reached earlier, in particular on questions the transit of energy resources, on carrying out innovative projects in the fuel and energy complex, and on setting up joint enterprises in this field,” Putin said after the talks, in remarks posted on his Web site. Russia and Kazakhstan are respectively the biggest and second-biggest oil producers in the former Soviet Union. Until the country broke up in 1991, almost all energy export routes from republics that then became independent went through Russia. Kazakhstan is now developing several alternative routes bypassing Russia, which seeks to maintain control over some former Soviet states by controlling their export routes. Putin and Nazarbayev have met 12 times in the last year, state television channel Russia Today reported, saying the annual volume of trade between their two countries is about $13 billion. Nazarbayev said other issues discussed include possible joint development of Kazakhstan's uranium deposits, which account for as much as 18% of the world's reserves, and potential joint enrichment of nuclear fuel, Interfax news agency reported on its Web site. Nazarbayev played down the importance of Kazakhstan sending oil abroad through non-Russian routes, saying that “in the oil and gas complex we are not competitors, we are partners.” Analyst Alexei Vlasov of Moscow State University disagreed, telling Russia Today that the two sides are “in competition with each other in energy.” Kazakhstan is developing three major hydrocarbons fields, Tengiz, Kashagan and Karachaganak, all of which are operated by US and western European-led ventures. The country's main export conduit is now a pipeline run by the Chevron Corp.-led Caspian Pipeline Consortium connecting Kazakhstan to the Russian Black Sea port of Novorossiisk, from where oil continues by tanker through the Bosporus strait to the Mediterranean Sea. The country needs more export routes as its oil output from the three major fields grows. KazMunaiGaz, a state-owned energy company, said in January it plans to start shipping oil across the Caspian Sea by 2011 to a pipeline run by a BP Plc venture. This line runs from Baku in Azerbaijan, across Georgia to the Turkish Mediterranean port of Ceyhan, bypassing Russia. Kazakhstan also bought half of a Georgian oil terminal on the Black Sea, Batumi, in December, through KazMunaiGaz unit KazTransOil, to boost exports through routes that avoid Russia. Earlier this month, Nazarbayev said the country may build a $1 billion refinery at Batumi, further strengthening its commitment to non-Russian options. And last week, KazMunaiGaz said it may build a $5 billion refinery near Ceyhan in Turkey. On March 15, Putin signed an agreement with his counterparts from Greece and Bulgaria to build a pipeline from the Bulgarian Black Sea port of Bourgas to the Greek port of Alexandroupolis on the Aegean Sea, giving the country its own outlet to the Mediterranean while bypassing the Bosporus. Kazakhstan has said it may take a stake in that line. Kazakhstan's efforts to avoid exporting oil across Russia led Moscow daily Kommersant to speculate that Putin's talks with Nazarbayev would be problematic. The newspaper said Russia was “strongly irritated” by Kazakhstan's movement toward the West, while its own “instruments of leverage” against the central Asian state were becoming ever fewer, Kazinform refers to Bloomberg.


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