We are open to cooperation

Caspian Energy (CE): Mr. Smailov, Kazakhstan and Azerbaijan are actively cooperating both bilaterally and within international organizations, including in the matters of implementation of large investment and transit projects. Which projects are the most demanded today and will be relevant in the coming years?

Alikhan Smailov, First Deputy Prime Minister, Minister of Finance of the Republic of Kazakhstan: First of all, necessary attention should be focused on the transit potential of the Caspian region. Kazakhstan is a member of the Trans-Caspian International Transport Route (TITR) international association, which brings together and represents today the interests of a number of countries and companies located along the TITR, thereby reviving the route of the historical Great Silk Road. The founders of the Association are: Kazakhstan Temir Zholy JSC NC and Aktau International Sea Trade Port from the side of Kazakhstan, Azerbaijan Railways CJSC, Azerbaijan Caspian Shipping Company and Baku International Sea Port from the side of Azerbaijan, Georgian Railway JSC and Batumi Sea Port from the side of Georgia.

As a result of the coordinated efforts of all TITR members, tariffs were reduced, constant work is currently underway to maintain a competitive level of rates, the transportation process was optimized (work on emerging issues, creating a pool, etc.). Continuous marketing work is underway to attract new goods to TITR, including export from Kazakhstan and import to Kazakhstan. A regular multimodal transport service has been established along the TITR route, and the delivery of goods by road or by sea from China, Kazakhstan and Central Asia to the ports of Batumi, Baku and Poti and then to Turkey is currently in place.

The interest of large transport and logistics companies in this international corridor is increasingly growing. In particular, on June 25, 2019 Astyk-Trans JSC was admitted as an associate member of the TITR Association by decision of the general meeting in the city of Nur-Sultan. Astyk-Trans JSC specializes mainly in operating specialized rolling stock and providing freight forwarding services for grain transportation. In view of the significant growth in demand for integrated services within the framework of this multimodal service, a significant increase is expected in traffic along the TITR routes to Turkey and further to the countries of the Middle East and Southern Europe.

Further speaking of the Caspian region, one should certainly mention the oil and gas industry, namely, it is worth paying attention to the oil and gas chemical industry. The petrochemical industry is one of the most important sectors of the global economy and represents significant potential for the economy of Kazakhstan. $1 invested in the petrochemical industry generates $2.3 for the country’s economy (Eurostat, OECD, World Bank). The main competitive advantage of the Republic of Kazakhstan for the development of the oil-gas chemical industry is affordable hydrocarbon feedstock for production of deep limit products. At present, a draft law has been developed to put in place a mechanism for pricing commercial gas for investment projects in the oil and gas chemical industry. There are also plans to develop strong criteria for selection of investment projects, which require feedstock supply.

Large projects in the petrochemical industry are currently under implementation in the Republic of Kazakhstan. For example, a $2.6 billion polypropylene production complex with the capacity of 500 thousand tons per year is currently under construction in the Atyrau region. The completion date is 2021. The issue of building a $6.5 billion gas chemical complex in Atyrau region is also under consideration now. It is expected to produce 1.25 million tons of polyethylene per year.