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Kazakhstan looks at new oil route to Europe

Kazakhstan, said on Tuesday, it was interested in establishing a new export route to carry its growing surplus of oil across the South Caucasus and the Black Sea to Europe.


Nursultan Nazarbayev, the Kazakh president, unveiled the oil export scheme after talks with Traian Basescu, Romania's leader, in Astana, the Kazakh capital. He said Kazakh oil could be transported in a new pipeline across Azerbaijan and Georgia to the Black Sea for transport to Romania by tanker.


The new route would help Kazakhstan reduce dependence on Russian pipelines that carry most of its westbound oil exports to market.


Analysts said Nazarbayev's announcement demonstrated a revival in Kazakh confidence in oil export routes in the South Caucasus that was damaged during a short war between Russia and Georgia in August 2008.


Georgian pipelines and railways came under attack during the war exposing the vulnerability of energy export routes that have helped Caspian producers end dependence on Russian pipelines.


Kazakhstan halted exports through a marine terminal at Batumi on Georgia's Black Sea coast during the war and said it might delay plans to expand the facility.


Kazakhstan needs to build new export pipelines to handle an expected surge in oil production after 2012 when the giant Kashagan field comes onstream in the Caspian Sea.


Mr Nazarbayev said Kashagan crude delivered to Romania could enter a planned pipeline from the Black Sea port of Constanta to Trieste in Italy.


"We are interested in this and we have given instructions accordingly to the oil companies," he said in remarks posted on the presidential website.


The pipeline from Constanta to Trieste would provide Romania with a strategic role as a transit route for Caspian oil to western Europe.


Kazakhstan produced 1.5m barrels a day of oil last year and expects to double output after Kashagan comes onstream.


KazMunaigas, Kazakhstan's state oil company, bought Rompetrol, the Romanian oil refining and distribution company, in 2008, establishing a foothold in European oil markets.


The Financial Times Limited

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