Baku News

27 August 2007 - Upstream OnLine - A private Azeri company and a state investment body plan to build a 1-million-barrel-per-day oil terminal on the Caspian Sea, which could help Azerbaijan double its oil export capacity. Executive director of the Azerbaijan State Investment Company (Asic) Anar Akhundov said today that Asic and KavkazTransService would build a terminal in Baku with an annual capacity of over 370 barrels of oil and oil products, Reuters reported. Azerbaijan currently exports a similar amount of oil and refined products a year, including its own crude and transit oil and refined products from Kazakhstan and Turkmenistan. Akhundov said the cost of the project would amount to $150 million. He said talks with foreign investors would start next week. "Islamic Development Bank has already shown interest in this project. There will be other international financial institutions and private banks," Akhundov told reporters. KavkazTransService is a subsidiary of Azeri private holding company Azersun, which already owns two terminals on the Azeri Caspian Sea coast via a trader, Middle East Petrol. The outlets ship between 3.0 million and 3.9 million tonnes of oil and oil products a year from Kazakhstan and Turkmenistan. The volumes are shipped across the Caspian Sea in small tankers, unloaded in the port of Baku and then sent by rail to the Black Sea port of Batumi in Georgia for re-export to the Mediterranean. The new terminal will work under the same scheme and could be also linked up to the BP-led Baku-Tbilisi-Ceyhan oil pipeline, launched last year. Azersun president Abdolbari Guzal has said the first stage of the new outlet could be launched in 2008. Azerbaijan wants to increase its trans-shipment capacity as it counts on rising production in Kazakhstan. But the top Kazakh Caspian Sea project, the giant Kashagan field, has been bogged down by delays and disputes between Astana and the project's leader Italy's Eni.