SOCAR, KMG move on Trans-Caspian pipeline

ASTANA, Kazakhstan, July 13 (UPI) -- State-run energy companies in Kazakhstan and Azerbaijan agreed to move ahead with feasibility studies on the Trans-Caspian energy transit system, officials say.

The $5 billion Trans-Caspian network would link Turkmenistan to Azerbaijan through an undersea route.

Vurgun Jafarov, head of the State Oil Co. of Azerbaijan Republic's bureau in Kazakhstan, says "practically all" of the outstanding issues on the project were resolved. He adds that SOCAR and its counterparts at KazMunaiGas had agreed to start feasibility studies on the project, the European weekly New Europe reports.

"One thing is certain. SOCAR and KMG will be the ones to order a feasibility study," he says. "To do so, the two companies will set up a joint structure or consider other ways of ordering a feasibility study."

Meanwhile, to secure shipping volumes, Jafarov says commitments were needed from Kazakhstan's offshore Tengiz and Kashagan fields.

"This is the most important thing," he adds.

KMG and SOCAR signed agreements in November 2007 on the principles of the Trans-Caspian system. The initial stages of the Trans-Caspian system will transport 500,000 barrels per day across the Caspian, with later estimates eclipsing 1 million bpd.

Jafarov notes the feasibility study on the project could be completed by the end of the year.