VZCZCXRO7855
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2317/01 3291036
ZNR UUUUU ZZH
R 241036Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3921
INFO RUCNCIS/CIS COLLECTIVE 0839
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0238
RUEHKO/AMEMBASSY TOKYO 0948
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0321
RHEHNSC/NSC WASHDC 0406
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002317 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EINV EPET EWWT AJ KZ
SUBJECT: KAZAKHSTAN'S NATIONAL SHIPPING COMPANY OPTIMISTIC 
ABOUT THE KAZAKHSTAN CASPIAN TRANSPORTATION SYSTEM 
 
REF: A. ASTANA 2266 
     ¶B. ASTANA 2276 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  On November 6, DCM and poloff met with 
Kazakhstan,s National Shipping company, Kazmortransflot 
(KMTF), to discuss its business structure and operations. 
KMTF identified the Kazakhstan Caspian Transportation System 
(KCTS) as its top priority and is leading the development of 
Kuryk port, but faces problems acquiring enough ships and 
qualified personnel.  KMTF is actively participating in 
international maritime cooperation activities.  END SUMMARY. 
 
FULL STEAM AHEAD ON THE KCTS 
 
¶3.  (SBU) On November 6, DCM and poloff met with Managing 
Director Serik Ishmanov, Managing Director of Economics and 
Finance Aslan Mynbayev, and Deputy General Director Sherkhan 
Sugurbekov to discuss KMTF,s business outlook.  KMTF 
officials emphasized that KCTS is their company,s major 
near-term project.  According to Mynbayev, KMTF started 
transporting Tengiz oil to Baku in October in close 
cooperation with Tengizchevroil (reftels).  KMTF anticipates 
that large amounts of oil will be transported over the 
Caspian from Kuryk and the Eskene-Kuryk pipeline.  The most 
challenging aspect of KCTS, according to Mynbayev, will be 
resolving the legal and regulatory basis for the project, 
since each party to the agreement will be liable for its own 
operators.  The specific liabilities of shippers also need to 
be clearly stipulated, he said. 
 
KMTF PLAYING AN ACTIVE ROLE IN KURYK PORT 
 
¶4.  (SBU) KMTF officials acknowledged their company,s active 
role in KCTS, as well as in constructing and operating the 
Kuryk port, located 47 miles from Aktau.  The Kazakhstan 
national rail company, Temir Zholy, and the Ministry of 
Transport are constructing a rail link between Aktau and 
Kuryk, while road and water pipelines are also under 
construction.  The port has a cargo terminal, primarily to 
serve the needs of Caspian offshore oil fields. 
Transshipments through Aktau port for 2008 (year to date 
through September) amounted to 7.7 million tons of cargo, 
including 6.1 million tons of oil and petrochemicals.  By 
2010 transshipments through Aktau seaport are expected to 
increase to 23 million tons.  KMTF also expects to ship 7.5 
million tons of oil from Kuryk in its first year of 
operation, with exports of oil from Kuryk expected to 
increase to 20 million tons between 2010 and 2015. 
 
EQUIPMENT AND PERSONNEL ARE MOST SEVERE CONSTRAINTS 
 
¶5.  (SBU) KMTF, however, faces challenges recruiting enough 
qualified personnel and acquiring enough ships to meet 
demand.  KMTF said it owns smaller tankers with a capacity of 
12,000 deadweight tons, but decided it will be more efficient 
to use larger tankers with a capacity of 55,000-60,000 
deadweight tons.  KMTF,s top priority will be the quality 
and safety of these ships, but because KMTF is a national 
company, the ships must be built in Kazakhstan.  KMTF expect 
Russian companies to build the ships at Kuryk, if government 
financing for a planned factory materializes.  KMTF will soon 
begin negotiations on how other KCTS-related facilities will 
be built and maintained.  KMTF officials emphasized that the 
Samruk-Kazyna merger has not affected their business in any 
way. 
 
¶6.  (SBU) To address the problem of hiring qualified 
personnel, KMTF started sending young cadets to the Russian 
Federation for maritime-related training last year.  There is 
also one Kazakhstani student at the U.S. Naval Academy in 
Annapolis.  Mynbayev has an MBA degree from Boston College. 
All three KMTF officials at the November 6 meeting pursued 
 
ASTANA 00002317  002 OF 002 
 
 
higher education abroad and appeared to be in their early 
thirties.  They noted that since Kazakhstan &is not a sea 
empire,8 the majority of qualified employees are relatively 
young. 
 
KMTF PURSUING INTERNATIONAL COOPERATION ACTIVITIES 
 
¶7.  (SBU) KMTF is actively involved in various international 
negotiations on maritime issues with multinational companies, 
and is also participating in a series of U.K. maritime safety 
conferences.  At the October conference in Astana, Sugurbekov 
said that Kazakhstan and KMTF are committed to meeting all 
International Maritime Organization standards.  KMTF is 
particularly interested in cooperation with border services. 
Reducing the time for documentation validation and processing 
through ports could save millions of dollars, according to 
Sugurbekov.  KMTF is also concerned about the potential for 
oil spills, and wants to work on prevention and emergency 
response operations.  KMTF officials indicated interest in 
participating in study-group activities in the United States 
and were eager to exchange ideas and opinions with 
international and domestic shipping companies, port 
officials, and maritime border guards. 
HOAGLAND