Baku-Tbilisi-Ceyhan (BTC) Pipeline - The Times Of Central Asia

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Oil Exports

Kazakhstan Weighs a Second Major Oil Export Route

Following repeated disruptions to the Caspian Pipeline Consortium (CPC) system, Kazakhstan’s leading oil producers are examining a much larger Trans-Caspian export route. A working group representing eight shareholders responsible for production in the Tengiz and Kashagan fields has commissioned a feasibility study for moving crude from the Atyrau area to Aktau, across the Caspian to Baku, and onward through the Baku–Tbilisi–Ceyhan (BTC) pipeline. The study is expected to go to shareholders in November. The current proposal follows a policy line set out in July 2022, when President Kassym-Jomart Tokayev identified the Trans-Caspian route as a priority and instructed KazMunayGas to examine options, including possible participation by Tengiz investors. The present study puts a much larger export channel under commercial examination. CPC remains indispensable, carrying more than four-fifths of Kazakhstan’s oil exports. Of the 78.7 million tons of oil that Kazakhstan exported in 2025, 64.8 million went through CPC. Existing alternatives are small by comparison. Even the eastbound flow to China and the Schwedt route through Russia together absorb only a fraction of CPC volumes, while current Trans-Caspian shipments are smaller still. What has changed is the cost of concentrating so much of Kazakhstan’s oil exports on CPC, not its underlying commercial importance. The producers are in fact studying two alternatives, a subsea pipeline or a much larger tanker fleet. The Trans-Caspian pipeline idea itself is not new. Variants surfaced in 2009 and appeared again in 2016. What is new is the present combination of shareholder sponsorship, operational urgency, and contemplated scale. Each option is intended to support volumes of up to 35 million metric tons a year. KazMunayGas (KMG) moved 1.3 million tons from Aktau toward BTC in 2025, while its agreement with SOCAR provides for a phased increase to 2.2 million tons annually. The shareholder proposal would expand the existing Trans-Caspian route into a second major export channel. Why Redundancy Now Repeated interruptions in CPC flows have converted the risks of route concentration into lost oil production and a lower national production target. In July, for example, attacks struck tankers loading or approaching the CPC marine terminal, repeatedly suspending operations. Energy Minister Yerlan Akkenzhenov later put production lost to January, June, and July disruptions at about 3.5 million tons and reduced the 2026 production target from 98 million to 96 million tons. Even temporary interruptions reduce revenues and force urgent production decisions upstream. A Trans-Caspian route capable of carrying 35 million tons a year would not replace CPC, but it would materially reduce Kazakhstan’s exposure to a prolonged interruption. The reported figure equals more than half the 64.8 million tons exported through CPC in 2025 and is almost sixteen times the 2.2-million-ton level contemplated under the existing KMG–SOCAR expansion agreement. It would allow Kazakhstan to divert a substantially larger share of production during disruptions. Kazakhstan can now reroute one or two million tons relatively quickly, but not the tens of millions carried through CPC. The first constraint is inside Kazakhstan. Tengiz and Kashagan lack a high-volume pipeline connection to...

Caspian Pipeline Consortium

Black Sea Risks Elevate Azerbaijan and Turkey in Kazakhstan’s Export Strategy

Bloomberg reported on August 8 that the Turkish authorities were withholding or delaying transit permission for some vessels bound through the Dardanelles for Novorossiysk. Some applicants were reportedly told that permits were not being issued, while others faced additional review. The practice appeared selective: vessels bound for some other Black Sea destinations continued to transit, while some Ukraine-bound vessels were also reportedly affected. On August 9, however, Turkish officials told Reuters that shipping through the Turkish Straits was proceeding smoothly and described the actions as temporary security measures rather than an ongoing restriction. The reported restrictions followed a sharp increase in attacks on commercial shipping around the Black Sea, including Turkish-linked vessels near Novorossiysk. Turkey’s Foreign Ministry expressed concern after attacks on the Turkish-owned Yaşar and Nadezhda and called on Russia and Ukraine to ensure navigational safety. Novorossiysk is especially important for Kazakhstan, because the Caspian Pipeline Consortium (CPC) terminal there handles the overwhelming majority of its oil exports. Although the CPC pipeline itself remains operational, the episode showed how quickly traffic serving Kazakhstan’s principal oil-export outlet could face an additional constraint. The events shed light on an export strategy Kazakhstan began developing several years before the current problems. Tokayev’s July 2022 instructions addressed both oil-export diversification through the Trans-Caspian route and alternative transport chains for other cargo. In particular, he called for greater use of Kazakhstan’s Caspian ports and the development of alternative railway routes. Later that year, KazMunayGas (KMG) and SOCAR established a framework for moving Kazakhstani oil from Aktau across the Caspian Sea and onward through the Baku–Tbilisi–Ceyhan pipeline, initially for up to 1.5 million tons annually. Kazakhstan, Azerbaijan, Georgia, and Turkey also adopted a 2022–2027 roadmap to remove bottlenecks along the Middle Corridor. Kazakhstan continued to develop transport links with Russia and China as it expanded Trans-Caspian routes through Azerbaijan, Georgia, and Turkey. The strategy extended Kazakhstan’s longstanding geopolitical multi-vector policy, which balances relations with partners in multiple directions, into the geoeconomic sphere. Tokayev made the combination explicit in his 2023 State of the Nation address. Relations with Turkey had meanwhile been elevated to an enhanced strategic partnership in May 2022, including transport cooperation and the Baku–Tbilisi–Kars railway. Kazakhstan and Azerbaijan deepened their strategic and allied cooperation later that year, likewise emphasizing transport and logistics. Closer ties with Azerbaijan and Turkey widened Kazakhstan’s options without displacing established routes through Russia. The CPC pipeline remains so dominant in Kazakhstan’s oil exports that no other existing route approaches its present scale. Of the 78.7 million tons of oil that Kazakhstan exported in 2025, the Energy Ministry reported the volume moving through the CPC pipeline at 64.8 million tons (the CPC itself reported about 63 million tons), meaning that more than four-fifths of Kazakhstan’s exported oil depended on the CPC system. Kazakhstan moved only about 1.4 million tons through the Aktau–Baku–Ceyhan (ABC) route in 2024, and about 1.3 million tons in 2025. Diversification cannot at present mean replacing CPC. The Baku–Tbilisi–Ceyhan (BTC) pipeline gives Kazakhstani oil a westbound egress...

Iran

How an Incident on the Azerbaijan-Iran Border Became a Test for Diplomacy in the Region

The drone strike on Azerbaijan's Nakhchivan Autonomous Republic on March 5 has become one of the most serious incidents in relations between Baku and Tehran in recent years. Azerbaijani authorities described the incident as a terrorist act and demanded explanations and an apology from Iran. Tehran, in turn, rejected the accusations, suggesting the possibility of a provocation by “third forces.” Following the drone incident, Kazakh President Kassym-Jomart Tokayev held a phone call with Azerbaijani President Ilham Aliyev to discuss regional security. According to the Azerbaijani presidency, Aliyev thanked Tokayev for condemning the attack on Nakhchivan and for voicing support for Azerbaijan. What began as a local security incident has raised concerns about regional stability in the South Caucasus. Terrorist Act Against the State Azerbaijani President Ilham Aliyev issued a statement strongly condemning "this despicable terrorist act. Those who committed it must be brought to justice immediately,” Aliyev said. According to Azerbaijan’s Ministry of Foreign Affairs, one drone hit the terminal building of Nakhchivan International Airport, while another crashed near a school in the village of Shekerabad. Two civilians were reportedly injured. Baku stressed that the attack, allegedly launched from Iranian territory, violated international law and could lead to a dangerous escalation of tensions in the region. Diplomatic Escalation Despite the harsh rhetoric in the first hours after the incident, Baku opted to rely primarily on diplomatic tools. The Iranian ambassador was summoned to the Azerbaijani Foreign Ministry and handed a formal note of protest requesting official explanations. Azerbaijan said on Friday that it was evacuating staff from its embassy in Tehran as well as its consulate in the city of Tabriz. At the same time, Azerbaijani security forces were placed on high alert. According to Aliyev, the country’s armed forces were instructed to prepare possible countermeasures. Turkish President Recep Tayyip Erdogan spoke by phone with Aliyev, condemning the attack and expressing support for Azerbaijan, according to official statements. Reports of alleged Iranian-linked sabotage plots also surfaced, with the Azerbaijani authorities stating that several terrorist attacks had been prevented on the country’s territory. According to the State Security Service, the Iranian Islamic Revolutionary Guard Corps was behind the plots. Among the alleged targets was the Baku-Tbilisi-Ceyhan oil pipeline, a strategic energy corridor linking the Caspian region with Turkey and one of the main routes for exporting Azerbaijani oil. According to Azerbaijani sources, other potential targets included the Israeli embassy, a synagogue in the capital, and a leader of the local Mountain Jewish community. The security service reported that three explosive devices had been brought into the country but were discovered and defused before they could be delivered. The development of the crisis has prompted increased diplomatic contact between world leaders. Russian President Vladimir Putin held a telephone conversation with Iranian President Masoud Pezeshkian amid the growing regional tensions. Shortly thereafter, Russia’s Foreign Ministry called on both sides to exercise restraint and emphasized the need for a thorough investigation into the drone strike. On March 7, the foreign ministers of all the Central...

Iran

OTS Faces Security Test from Turkey to Central Asia

Iran's widening war has now reached the institutional space linking Turkey, the South Caucasus, and Central Asia. Turkey said on March 4 that NATO air defenses destroyed an Iranian ballistic missile entering Turkish airspace, while Azerbaijan said the next day that four Iranian drones crossed into Nakhchivan, injuring four people, and damaging civilian infrastructure at the exclave’s airport. Iran denied targeting Nakhchivan; in the Turkish case, the missile’s intended target has not been fully clear in public reporting. Even so, the combined effect was unmistakable. By March 7, the Organization of Turkic States (OTS) had become more than a bystander to a Middle Eastern war that had earlier seemed outside its main agenda. This is what gave the OTS foreign ministers’ meeting in Istanbul its significance. The Turkish Foreign Ministry announced on March 6 that the informal meeting of the OTS Council of Foreign Ministers would be held in Istanbul on March 7, with Foreign Minister Hakan Fidan hosting. After the meeting, the ministers adopted a joint statement declaring that threats to the security of any OTS member are a matter of concern for the whole organization. That language does not make the OTS a military alliance. It does, however, show the organization moving more openly into collective political-security signaling when member states come under attack. Why Nakhchivan Matters Nakhchivan is central to the logic of this story. The exclave is an integral part of Azerbaijan, but is separated from the rest of the country. It borders Armenia, Iran, and Turkey, making it significant out of proportion to its size. A military strike there is not a routine border incident. It reaches one of the most sensitive nodes in the wider Turkic political space: it is a meeting point for Azerbaijani sovereignty, Turkish strategic concern, and Iranian proximity. Until recently, Nakhchivan’s special status and borders were anchored in the 1921 Moscow and Kars treaties, which gave Turkey and Soviet Russia a formal say over the exclave’s autonomy and, it could be argued, its external security. But last year, Baku folded Nakhchivan more tightly into Azerbaijan’s domestic legal order by removing those references (along with other changes) from the constitution of the exclave, which has suddenly become a target in a much wider regional confrontation. Baku’s response to the Iranian attack showed that it saw the incident in political as well as tactical terms. President Ilham Aliyev said Azerbaijan would prepare retaliatory measures. Reuters later reported that Azerbaijan had ordered the evacuation of its diplomats from Iran, citing safety concerns. This is understandable, particularly in light of the January 27, 2023, incident when an armed attacker entered Azerbaijan’s embassy in Tehran and opened fire, killing the head of the embassy’s security and wounding two other staff. Baku called this a terrorist attack, evacuated most of its diplomatic personnel, and suspended embassy operations. Azerbaijani officials also said the March 5 attack on Nakhchivan violated international law, rejecting any implication that it could have been a technical mishap. The stakes widened further after...

Peace Initiative

Opinion: Washington Meeting and the Shifting Geopolitics of the Caspian

The Washington meeting between Armenia and Azerbaijan, hosted by President Donald Trump on August 8, 2025, may go down as a pivotal moment in the geopolitics of the Caspian and the wider Eurasian space. While on the surface the talks aimed to normalize relations between the two South Caucasus neighbors, the ripple effects extend far beyond bilateral reconciliation. For Azerbaijan, the meeting is not only about ending three decades of conflict with Armenia but also about positioning itself as a central bridge linking the Caspian Basin, Central Asia, and even Europe. The Caspian region has always been a security crossroads, where energy interests, military presence, and trade routes overlap. Russia’s war in Ukraine, the Iran-Israel conflict, and shifting Western engagement have made the region more volatile. In this context, a potential Armenia-Azerbaijan settlement offers a chance to stabilize the South Caucasus - the natural gateway between the Caspian and Europe. For Azerbaijan, peace with Armenia would solidify its position in the region where Baku has promoted several important transregional projects such as the Baku-Tbilisi-Ceyhan oil pipeline, the Southern Gas Corridor, and the Baku-Tbilisi-Kars railway. Azerbaijan is heavily investing in the development of the Caspian trade routes, energy infrastructure, and regional connectivity projects such as the Middle Corridor. Stability in the South Caucasus also makes it harder for external actors to exploit divisions - an especially significant factor given the previous attempt to exploit Armenia against Azerbaijan and Türkiye. That strategy brought no tangible results to Armenia, which remained regionally isolated and dependent on Russia. After the military defeats in 2020 and 2023, the Armenian leadership realized that peace and respect for the principle of territorial integrity is a much greater opportunity for the country rather than an irredentist project, which Prime Minister Nikol Pashinyan dubbed “mythical.” At the same time, a peace framework reduces the risk of military escalation spilling into the Caspian region. Naval modernization efforts by Russia and Iran in recent years have heightened anxieties. In short, normalization indirectly enhances Azerbaijan’s capacity to act as a stabilizing actor within the Caspian basin. Increasingly, Iran has also spoken about peace and cooperation, especially with Azerbaijan. Relations were tense a few years ago, but the incumbent President, Masud Pezeshkian, questioned the strategy employed previously by the Iranian clerics regarding Azerbaijan, which failed to gain any benefits. Perhaps the most significant geopolitical dividend for Azerbaijan lies eastward, across the Caspian. The Central Asian states - Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan - have long sought secure, diversified links to Europe. Russia’s war has made northern routes through its territory unreliable, while instability in the Red Sea undermines the traditional supply route. That leaves the Trans-Caspian link through Azerbaijan as promising. The Washington meeting, by promoting the peace agenda, reassures Central Asian partners that Baku is a reliable hub. Azerbaijan, Kazakhstan, and Uzbekistan signed an MOU about the transfer of alternative energy sources to Europe through another potential project – a Black Sea electricity cable from Georgia to Romania and Hungary. Azerbaijan...

Middle Corridor

How Armenia–Azerbaijan Peace Lowers Corridor Risk for Central Asia

The framework announced on 8 August 2025 in Washington for Armenia–Azerbaijan peace and development resets the security–economics equation in the South Caucasus and holds deep implications for Central Asia. At its core is the mutual recognition of territorial integrity, renunciation of force, and a transit arrangement under Armenian jurisdiction linking mainland Azerbaijan with its exclave of Nakhchivan across the Syunik province. For Central Asia, the immediate significance is the de-risking of the westbound Caspian–Caucasus–Anatolia artery centered on Azerbaijan’s Alat Port and the Baku–Tbilisi–Kars (BTK) rail route. As reported by Azerbaijan Railways, BTK’s operating capacity was lifted to 5 million tons/year (t/y) in May 2024 and has a path for expanding to 17 million tons in later phases. Alat currently lists 13 berths and dedicated ferry roll-on/roll-off (“ro-ro”) facilities. A dependable Armenian-jurisdiction link would create a second, legally unambiguous passage across the South Caucasus. Single-route dependence through Georgia would be reduced, as would the variance of end-to-end journey times. That reliability directly benefits Kazakhstan and Turkmenistan, whose westbound flows move by rail-ferry from Aktau/Kuryk to Alat and from Turkmenbashi to Alat before continuing overland toward Türkiye. Peace Reframes the Middle Corridor These developments also strengthen the business case for incremental investments in ports, ferries, rail paths, and energy interconnectors tied to the Middle Corridor, including swap-based energy routing already practiced between Azerbaijan and Kazakhstan. At Alat, confirmed as the hinge of the Middle Corridor, political risk converts into bankable time, which prices into contracts, which later in turn finances small but decisive capacity steps; bankable time begets bankable trade. Conflict risk in the South Caucasus has been a priced variable since 2020. A durable peace narrows that risk band and yields three operational effects with country-specific salience. First, marine war-risk and cargo premiums in nearby high-risk theaters such as the Gulf, typically ranging from 0.2–0.3% of hull value, rose to 0.5% during recent tensions. This figure offers a benchmark for how underwriters re-price routes as perceived closure risk changes. Second, forwarders can trim buffer time, improving asset utilization for rail paths and ro-ro (roll on, roll off) rotations pairing the Caspian ports (Alat, Aktau/Kuryk, Turkmenbashi). Third, carriers gain confidence to publish regular rotations and pre-position equipment; the Azerbaijan Caspian Shipping Company notes 1–2-day intervals in favorable conditions and shows multiple departures on a given day (e.g., August 15 listed Alat–Kuryk, Alat–Turkmenbashi, etc.). Lower variance is not cosmetic; it is collateral for contracts. Banks recognize collateral. Insurers do, too. When variability falls, rate discovery improves; as a result, multi-month slots or rail-path agreements become financeable. This is precisely the mechanism exporters from Kazakhstan and Turkmenistan need to secure predictable capacity into Azerbaijan and onward to Türkiye. Reliability also changes routing choices. At Alat, rail-ferry cargo arriving from Aktau/Kuryk or Turkmenbashi can be planned to run either via Georgia or via Syunik toward Kars, whichever route minimizes dwell time and schedule variance for the onward leg. Even where pure distance savings are modest, gains in reliability reduce movements of empty containers. They also...