U.S. grant to help Azeri oil, gas flow

BAKU, Azerbaijan, Aug. 17 (UPI) -- U.S. trade officials will work with Azerbaijan to study new oil and gas pipeline routes, which they say will promote cross-country energy cooperation.

The U.S. Trade and Development Agency announced in Baku, Azerbaijan, Thursday a $1.7 million grant to the State Oil Co. of the Azerbaijan Republic to conduct a feasibility study of taking both natural gas and oil from Azerbaijan.

It will look at a gas pipeline from Kazakhstan through the Caspian Sea to Azerbaijan, then to Georgia and Turkey, as well as an oil pipeline from Kazakhstan to Azerbaijan.

"This is a critical part of the next phase in the development of Caspian oil and gas resources," James Wilderotter, general counsel at USTDA, said in a statement. "We look forward to the day when oil and gas will flow to customers in Europe through these pipelines."

Wilderotter was joined by SOCAR president Rovnaq Abdullayev, U.S. Assistant Secretary of State for Economic, Energy and Business Affairs Daniel Sullivan and Azeri Foreign Minister Elmar Mammadyarov for a ceremony in Baku.

The pipeline would give Kazakhstan an alternative route to send its oil and gas to market than Russia, a major supplier of both that Europeans are attempting to become less reliant on.

Kazakhstan intends to raise oil production from 1.5 million barrels per day to 3.5 million bpd and natural gas production from 30 billion cubic meters in 2005 to more than 70 billion cubic meters by 2015, which will require the additional pipeline capacity.