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. Last Updated: 07/27/2016

More Kazakh Oil in Russian Pipeline

Presidential Press ServicePutin attending a welcoming ceremony with Nazarbayev at the Ak-Orda presidential palace in Astana on Thursday.
ASTANA, Kazakhstan -- President Vladimir Putin, on a Central Asian tour aimed at boosting Russia's influence in the region's rich energy sector, agreed Thursday to allow more Kazakh oil to be shipped through Russian territory.

At talks with Kazakh President Nursultan Nazarbayev, Putin agreed to the expansion of a pipeline that carries oil from Kazakhstan's Tengiz field to the Russian Black Sea port of Novorossiisk.

Russia previously had resisted expanding the pipeline, run by the Caspian Pipeline Consortium fearing that it would put Kazakh and Russian oil in competition for the limited number of tankers allowed to go from Novorossiisk through the overcrowded Bosporus and on to Western markets.

CPC management has been pushing for years to expand capacity to 1.35 million barrels per day from the current 750,000 bpd, which would enable more Kazakh oil to reach European markets, but has been unable to convince Russia.

Nazarbayev indicated Thursday there would be a limited expansion, falling far short of Chevron's hopes.

"Now there is the question of expanding the Caspian Pipeline Consortium's pipeline. We have discussed it in detail -- to 40 million tons [833,000 bpd]," he said.

Chevron has 15 percent in CPC. Other shareholders include Kazakhstan, Rosneft, LUKoil, Oman, BP and Shell.

Russian resistance to boosting the CPC pipeline prompted some members of the consortium to consider an alternative route connecting with the Baku-Tbilisi-Ceyhan pipeline that carries Caspian oil to Turkey on a route that bypasses Russia.

That pipeline was strongly backed by the United States, reflecting competition between the West and Russia for Central Asia's immense oil and gas reserves.

Putin also agreed to Kazakhstan's participation in a Russian-controlled 280-kilometer pipeline is planned to run from Bulgaria's Black Sea port of Burgas to Alexandroupolis in Greece.

Following the talks in Astana, Nazarbayev told reporters that his country "was absolutely committed to shipping most of our hydrocarbons, if not all, through [Russian] territory," the official news agency Kazinform said.

Putin was due to leave for Turkmenistan later Thursday for talks with the country's new president, Gurbanguly Berdymukhammedov.

The Russian, Turkmen and Kazakh leaders plan Friday to discuss construction of a new pipeline along the Caspian coast that would carry natural gas from Turkmenistan into Europe via Kazakhstan and Russia, Russian officials said.

The prospective deal would further boost Russia's role as a major energy supplier to Europe and strengthen Western fears that Moscow could use its clout for political purposes.

The United States and Europe have been lobbying for a trans-Caspian gas pipeline, from Kazakhstan to Turkey via Azerbaijan and Georgia as they try to secure sources of oil and gas outside the Middle East and to draw Caspian states away from Russia and closer to the West.

From Turkmenistan, Putin on Saturday will go to Kazakhstan's Caspian city of Aktau.

AP, Reuters