11 January 2007
Kazakhstan is gradually becoming one of the pillars of energy security in Asia and Europe, as it plans to produce 3.5 million barrels of oil a day (mbd) and 60-80 billion cubic meters (bcm) of associated gas by 2015, in the words of its President Nursultan Nazarbaev.
Over the past decade, the development of new oil and gas fields in Kazakhstan has also generated an increasing interest in new export routes to Europe and more recently to China, in addition to its historic dependence on Russian pipelines. Kazakhstan views multiple pipelines as key to its efforts to ensure that no regional power can exercise strategic control over its energy routes and its broader economic and political ties to western, Mediterranean, and Asian partners. US, European and Asian energy companies too favour multiple pipelines to ensure reliable market access and predictable commercial regime so as to avoid excessive transit fees set by any one pipeline operator and mitigate geopolitical risks.
Furthermore, since gaining its independence fifteen years ago, Kazakhstan’s importance has considerably increased as a geopolitical power on the former Soviet geography, sandwiched between China and Russia, due to its “multi-vectoral” relations with powerful neighbours, the US, the EU and Japan. It is now recognised as a key power to reckon with in Eurasia. Kazakhstan’s expanding cross-border energy linkages to Russia, China, other Central Asian countries, and possibly westward to Europe via Turkey will likely enhance its independence, economic development/diversification and geopolitical standing.
This paper begins with an overview of the growing importance of natural gas and supply security concerns before elaborating on high demand regions to which Kazakh gas could possibly be shipped. Then, the focus shifts to Kazakhstan’s gas reserves, current and projected production, as well as on export routes available or under consideration. The paper concludes with a number of signals, positive and negative, for governments, corporations and multinational organizations to watch.