VZCZCXRO1259
PP RUEHAG RUEHROV
DE RUEHKB #0951 2821417
ZNY CCCCC ZZH
P 081417Z OCT 08
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 0130
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES
RUEAIIA/CIA WASHINGTON DC
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUEKDIA/DIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RHEHAAA/WHITE HOUSE WASHDC

C O N F I D E N T I A L BAKU 000951 
 
SIPDIS 
 
E.O. 12958: DECL: 09/08/2018 
TAGS: PGOV PREL AZ KZ ENRG
SUBJECT: AZERBAIJAN: SOUTHERN CORRIDOR STARTS WITH 
CROSS-CASPIAN TCO SHIPMENTS 
 
Classified By: Ambassador Anne E. Derse, Reason 
 
¶1. (C) SUMMARY: On October 9 the "Southern Corridor" project 
will take a huge step forward when the first tanker to carry 
Tengizchevroil oil to Azerbaijan will begin loading in 
Kazakhstan, with an expected arrival date in Baku of October 
¶11.  TCO volumes heading to Baku in October will be 
approximately 140 thousand metric tons and 250 thousand 
metric tons in November, towards an eventual plateau of 420 
thousand tons per month.  Although the absolute volumes of 
TCO oil to be shipped to Azerbaijan are not massive, the 
procedures put in place and the cooperative links established 
among the various entities in Georgia, Azerbaijan and 
Kazakhstan will prove essential when the truly massive 
volumes from Kashagan begin to seek ways to market o/a 2013. 
END SUMMARY. 
 
¶2. (C) On October 8 Energyoff met with Chevron Azerbaijan 
President Robert Dastmalchi and Chevron's Shipping Marine 
Superintendent for the Caspian Region Captain Vincenzo 
Berardi, to discuss upcoming shipments of Tengizchevroil 
(TCO). 
 
¶3. (C) An upbeat Berardi said that the first cross-Caspian 
shipments of TCO oil would start the following day (October 
9), when a 13,000 deadweigt ton (dwt) ship will dock at Aktau 
to be loaded up with approximately 11.5 metric tons of oil, 
to make the 20-22 hour trip to the Azertrans Sangachal 
terminal 40 kilometers south of Baku. 
 
¶4. (C) This month (October) TCO plans to ship approximately 
140-150 thousand metric tons of oil (approximately 1.2 
millions barrels, at 7.8 barrels per metric ton) to 
Azerbaijan in October, half of which (68 thousand metric 
tons) will go into BTC and half of which (67.5 thousand 
metric tons) will travel by rail to Batumi.  TCO plans to 
increase the monthly amount shipped by 13,000 dwt ships to 
Baku to 250 thousand metric tons in November, towards an 
eventual plateau of 420 thousand tons per month (five million 
metric tons per year, which would be approximately 430 
cross-Caspian trips by the 13,000 dwt tankers). 
 
¶5. (C) Berardi said that despite the increased spare capacity 
in BTC due to recent production slowdowns, an increased 
amount of TCO oil cannot be shipped via the BTC pipeline, as 
TCO volumes are contractually linked to overall BTC 
throughput.  Berardi said that he expects TCO volumes to be 
shipped via BTC to increase in November, as overall BTC 
volumes are slated to increase in November (Comment: overall 
BTC volumes could increase from approximately 300,000 to 
540-570,000 bpd in November, if BP Azerbaijan is able to 
solve platform generator/power problems for the East and West 
Azeri Platforms).  Dastmalchi said that regardless of how 
much TCO can ship via BTC, it will still seek to ship 
appreciable amounts by rail to Georgia so as to 'work out the 
kinks' for this method. 
 
¶6. (C) According to the freight-forwarding contract TCO has 
signed with the "Cross-Caspian" freight forwarding company in 
Azerbaijan, for the first few years of the contract TCO 
volumes will be split between the two Georgian terminals of 
Batumi (owned by Kazmunigaz) and Kulavi (owned by SOCAR). 
Berardi said that whereas the Batumi terminal's capacity is 
for ships up to 140,000 dwt, the Kulavi terminal's current 
capacity is only 40,000 dwt.  TCO has asked Kulavi to 
increase this capacity to up to "Aframax" ship size 
(85-125,000 dwt).  Kulavi is dredging to this effect, 
although a recent dredging accident with three fatalities has 
slowed down the work.  Berardi says that Kulavi also needs a 
larger turning basin. 
 
¶7. (C) COMMENT:  The start of TCO volumes coming to Baku is 
very good news: after years of preparation, TCO volumes are 
set to start flowing in significant amounts to Azerbaijan and 
through Azerbaijan to Georgia.  Although the absolute volumes 
of TCO oil to be shipped in this manner are not massive, the 
procedures put in place and the cooperative links established 
among the various entities in Georgia, Azerbaijan and 
Kazakhstan will prove essential when the truly massive 
volumes from Kashagan begin to seek ways to market o/a 2013. 
DERSE