Kazakhstan, Azerbaijan Deepen Middle Corridor, Infrastructure & Mutual Investment Connectivity
The development of relations between Azerbaijan and Kazakhstan occupies an important place in the context of the unification of the infrastructures of the two countries and cooperation in the region.
Both countries, which have significant resources and a geostrategic position at the intersection of important transport routes, are aware of the need to strengthen their relationships to ensure sustainable economic growth and development of the entire region.
The infrastructure association of Azerbaijan and Kazakhstan has a high potential for improving transport and logistics links in the region of Central Asia and the South Caucasus.
Both are striving to develop their transport corridors, including rail, road and sea routes, in order to ensure more efficient movement of goods and passengers between regions.
Joint efforts in the development of transport infrastructure open up new opportunities for trade, investment and tourism development. Cooperation between Azerbaijan and Kazakhstan is of strategic importance for the entire region. Both countries have significant energy resources and play an important role in the supply of oil, gas and other energy resources to the world market.
Joint projects in the energy sector and the development of transport routes make it possible to diversify supplies and increase the energy security of the region.
Azerbaijan and Kazakhstan are transforming from regional centers to global ones. Mutual visits of leaders and support provided by various structures of Kazakhstan help to develop bilateral relations.
“The allied relations between Azerbaijan and Kazakhstan are a solid foundation for the further development of our cooperation, President Ilham Aliyev said, making press statements with President of Kazakhstan Kassym-Jomart Tokayev,” President of the Republic of Azerbaijan Ilham Aliyev said on April 10, making a joint statement to the press with President of Kazakhstan Kassym-Jomart Tokayev in Astana.
“Today, we are enriching this foundation with specific content. The decisions made in Baku in August of last year are already being implemented today, including, as noted by President Tokayev, the decisions on starting the transit of Kazakh oil through Azerbaijan, launching serious work on connecting the transport and logistical infrastructure of our countries in order to fully utilize the opportunities of the Middle Corridor,” President Ilham Aliyev said.
The Middle Corridor
The development of the Trans-Caspian International Transport Route (TITR), or the Middle Corridor, is a priority for both states. A roadmap has already been signed until 2027 for the simultaneous elimination of “bottlenecks”. The next step should be to create a single operator for this route.
The construction of the Khorgos-Eastern Gates Special Economic Zone (SEZ) in Kazakhstan was a significant step towards ensuring the smooth functioning of the Middle Corridor (Trans-Caspian International Transport Route – TITR).
As the transport links of the Middle Corridor continue to improve and the cost of delivery decreases, they will provide countries along the corridor with much greater access to markets far beyond their region. The Middle Corridor is important for all countries along its route, providing them with the opportunity to enter foreign markets outside the region.
Kazakhstan continues to work with Azerbaijan on projects in the field of traditional energy resources. The country is already using the Baku-Tbilisi-Ceyhan and Baku-Supsa pipelines to export its oil.
KazMunayGas JSC and the State Oil Company of the Republic of Azerbaijan (SOCAR) signed an agreement providing for the transportation of 1.5 million tons of oil from the Tengiz field per year in the direction of the Baku-Tbilisi-Ceyhan oil pipeline.
The volume of Kazakh oil transported from the port of Aktau to the port of Baku increased by 60.5 tons or 75% in April 2023 compared to the previous month – up to 312,600 tons.
Kazakhstan and Azerbaijan are also exploring the possibility of establishing a joint venture to facilitate the transit of oil through the territory of Azerbaijan. This joint venture can be a single operator on this transit route, with a thorough tariff, cheap transit opportunities, and the use of innovative technologies.
Kazakhstan is discussing joint investments in gas production with the SOCAR. The national QazaqQaz company of Kazakhstan and SOCAR have already held a number of meetings and negotiations in the gas industry, especially on investing in gas exploration and production, as well as on the construction of new LNG plants.
Meanwhile, the Azerbaijani side has already expressed interest in specific projects of the gas industry of Kazakhstan, and the parties will continue to explore the possibilities of joint cooperation.
At the same time, both countries are striving to start exporting renewable energy sources to the European market. In this regard, together with Azerbaijani colleagues, Kazakhstan has already started the implementation of the project of laying a high-voltage cable along the bottom of the Caspian Sea.
This line will connect Kazakhstan with Türkiye, and then further with Europe. The same project is being implemented on the Black Sea, where Azerbaijan also participates.
Azerbaijan is currently among the 15 largest investors in the economy of Kazakhstan. During the business mission of Kazakh entrepreneurs to Azerbaijan, with contracts worth US$55 million being signed. The trade turnover between the two countries in the first 4 months of this year increased by US$50 million to US$183 million.
Kazakhstan can also offer the Azerbaijani side 110 new types of goods worth about US$300 million for further expansion of trade and economic relations. Kazakhstan has also expressed a desire to establish supplies of fruit and vegetable products from Azerbaijan, especially in the western part of the country.
The Turkic Investment Fund also creates a good basis for the development of bilateral economic relations between Azerbaijan and Kazakhstan.
In addition, Azerbaijan can help Kazakhstan with grain logistics to the Middle East. This can be done through the İnternational North-South Transport Corridor.
The development of relations between Kazakhstan and Azerbaijan plays a key role in ensuring energy security, strengthening connectivity and creating a safer, faster, reliable and cost-effective transport system in Eurasia.