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Viewing cable 09ASTANA1303, KAZAKHSTAN: THE STRATEGIC IMPORTANCE OF AKTAU SEA PORT

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Reference ID Created Released Classification Origin
09ASTANA1303 2009-08-03 09:48 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana
VZCZCXRO3036
OO RUEHAG RUEHAST RUEHBC RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDE RUEHDF
RUEHDIR RUEHFL RUEHIK RUEHKUK RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ
RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV RUEHSK RUEHSL RUEHSR RUEHTRO
RUEHVK RUEHYG
DE RUEHTA #1303/01 2150948
ZNR UUUUU ZZH
O 030948Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5931
INFO RUCNCIS/CIS COLLECTIVE 1806
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1173
RUEHKO/AMEMBASSY TOKYO 1875
RUEHUL/AMEMBASSY SEOUL 0834
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHDC 1359
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1750
UNCLAS SECTION 01 OF 02 ASTANA 001303 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, NEA/IR, EEB/ESC 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EPET EINV MARR RS IR KZ
SUBJECT:  KAZAKHSTAN:  THE STRATEGIC IMPORTANCE OF AKTAU SEA PORT 
 
REF:  (A) ASTANA 1201 
      (B) ASTANA 1196 
      (C) ASTANA 1105 
      (D) ASTANA 0748 
      (E) ASTANA 0675 
 
ASTANA 00001303  001.2 OF 002 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Post has been informed that the U.S. Trade and 
Development Agency has decided not to approve two proposed projects 
to develop Kazakhstan's maritime and port capabilities because 
Kazakhstan conducts trade with Iran through Aktau, its principal 
Caspian port, and thus the two projects might indirectly benefit the 
Iranians.  We urge immediate reconsideration of this decision. 
Enhancing Kazakhstan's maritime and port capabilities and promoting 
the development of Aktau, Kazakhstan's sole Caspian deepwater sea 
port, support our strategic interests of promoting global energy 
security and stabilizing Afghanistan.  Aktau provides an alternative 
export route for Kazakhstan's increasing crude oil production, which 
allows crude to be shipped westward through Azerbaijan and Georgia. 
Aktau is also a key transportation hub for the Northern Distribution 
Network, which provides for transit of non-lethal supplies in 
support of U.S. troops in Afghanistan.  Iran was responsible for 
just 1.9% of Kazakhstan's overall trade turnover in 2008.  Much of 
this trade is conducted through Aktau port; however, Kazakhstani 
crude exports through Aktau to Iran have declined by half since 
2005.  END SUMMARY. 
 
3. (SBU) Post has been informed that the U.S. Trade and Development 
Agency (USTDA) has decided not to approve two proposed projects to 
develop Kazakhstan's maritime and port capabilities because 
Kazakhstan conducts trade with Iran through Aktau, its principal 
Caspian port, and thus the two projects might indirectly benefit the 
government in Tehran.  The first project would help Kazakhstan 
establish Electronic Documentation Procedures (EDP) to reduce tank 
vessel port call time associated with vessel clearance requirements. 
 EDP would increase efficiency at existing Kazakhstani ports, 
reducing the cost of transportation while at the same time paving 
the way for greater transparency and better monitoring by national 
maritime authorities.  The second project would entail a review of 
Kazakhstan's maritime practices, regulations, and legislation to 
ensure that they meet international standards.  Implementation and 
compliance with international maritime treaties, laws, and 
regulations will have a significant impact on the technical 
infrastructure, capital investment, and operating costs of 
trans-Caspian crude transportation. 
 
4. (SBU) We urge immediate reconsideration of the decision not to 
fund the two projects.  Enhancing Kazakhstan's maritime and port 
capabilities and promoting the development of Aktau, Kazakhstan's 
sole deepwater sea port, supports our strategic interests of 
promoting global energy security and stabilizing Afghanistan. 
 
5. (SBU) Aktau provides an alternative export route for Kazakhstan's 
increasing oil production, enabling crude to be shipped westward 
through Azerbaijan and Georgia and thus reducing Kazakhstan's 
reliance on Russia as a transit country.  The Tengizchevroil (TCO) 
consortium, owned 50 percent by Chevron and 25 percent by 
ExxonMobil, already ships approximately 100,000 barrels per day 
(bpd) of crude from Aktau to Baku, for onward transit to world 
markets via the Baku-Tbilisi-Ceyhan pipeline.  Once the Kashagan 
consortium -- in which ExxonMobil and ConocoPhilips have significant 
ownership stakes -- commences production in 2014, it too will need 
initially to use Aktau for any crude transit which does not go 
through Russia.  Over the longer run, international oil companies 
support the development of the Kazakhstan-Caspian Transportation 
System -- which entails constructing a pipeline from the oil fields 
to the new Caspian port at Kuryk -- but they will not commit crude 
volumes to the system unless they have confidence in its safety and 
reliability.  Both USTDA projects would help in providing that 
confidence. 
 
ASTANA 00001303  002.2 OF 002 
 
 
 
6. (SBU) Aktau port also plays a critical role in the Northern 
Distribution Network (NDN), facilitating the transit of non-lethal 
military cargo to U.S. troops in Afghanistan.  As reported in reftel 
A, Aktau Port's Novikov told the Ambassador on July 16 that Aktau 
fully supports the NDN and is prepared to increase its capacity to 
process vessels and unload containers.  USTDA's EDP project in 
particular would help to increase Aktau's capacity and efficiency. 
 
7. (SBU) Despite the close geographic proximity of Kazakhstan and 
Iran, Iran is a relatively small trading partner for Kazakhstan.  In 
2008, Kazakhstan exported just $2.040 billion of goods (mostly crude 
oil, wheat, and steel) to Iran, and imported a miniscule $60 
million.  The total $2.1 billion in two-way trade accounted for just 
1.9% of Kazakhstan's overall $109.1 billion in trade turnover for 
2008.  Much of Kazakhstan-Iran bilateral trade is conducted through 
Aktau, which in 2008 shipped 1.5 million metric tons of goods to 
Iran, and received 45,000 metric tons of goods from Iran.  However, 
KazMorTransFlot officials told the Ambassador that oil exports from 
Kazakhstan to Iran have declined to about 50,000 barrels per day 
(bpd), or half of the volume exported in 2005.  As far as we know, 
most of Aktau's trade is conducted with Azerbaijan and Russia, 
not/not Iran. 
 
8.  (SBU) COMMENT:  We are unclear if there is any legal reason why 
USTDA cannot move forward with the two projects it has developed in 
conjunction with its Kazakhstani partners.  We believe that our 
strategic interests in enhancing Kazakhstan's maritime and port 
capabilities and developing Aktau port trump any indirect and 
incidental benefits to the Iranians from the proposed projects.  We 
thus strongly recommend that USTDA reconsider its decision not to 
fund the projects.  The government of Kazakhstan is well aware of 
U.S. policy toward -- and sanctions against -- Iran, and has been a 
responsible partner in that regard.  In fact, in recognition of U.S. 
policy, Kazakhstan's oil exports to Iran continue to decline, even 
as Kazakhstan's overall trade volume increases.  Our failure to move 
forward on the USTDA projects would send the government a mixed 
signal, calling into question the sincerity and seriousness of our 
support for Kazakhstan's multi-vector crude export policy, and the 
importance of Kazakhstan to the Northern Distribution Network.  END 
COMMENT. 
 
HOAGLAND