Agreement had been reached on setting up a consortium for an export pipeline for Kazakh crude via Turkey to the Mediterranean, Prime Minister Tansu Ciller and Kazakh President Nursultan Nazarbayev announced on 15 August, following talks in Almaty. However, Kazakhstan has offered only qualified support to the Turkish proposal and wants Russian involvement, Turkish press reports say (MEED 18:8:95, page 28).

Ciller was in Almaty on the first leg of a Central Asian tour also taking in Kyrgyzstan and Turkmenistan. Turkey has been pressing for the pipeline to run to Ceyhan in the Gulf of Iskenderun; Russia's preference is for Kazakh crude to be exported from its Black Sea terminal of Novorossiysk. However, Nazarbayev stressed that Russia would have to be involved in the Turkish proposal.

The pipeline agreement provides for the establishment of a joint venture company to make feasibility studies. The Kazakhs have refused to commit themselves to detailed Turkish studies, say industry sources.

Nazarbayev also said petroleum companies and interested countries should support the routing of the pipeline to the Mediterranean. The $2,400 million pipeline proposed by Turkey would carry 20 million tonnes of crude annually, together with 25 million tonnes annually of crude from a concession in the Azeri sector of the Caspian Sea.

Turkey is also in the process of forming a project group to implement an export route for early production from the Caspian concession, and has submitted a proposal for this to the Western-led consortium holding it. Turkish officials believe the Azeri early oil routing could be a pathfinder for the main oil pipeline taking in both Azerbaijan and Kazakhstan.

However, Nazarbayev also said the most important issue was to get Kazakhstan's crude out to world markets, and that Almaty was ready to talk business about any solutions. All interested countries should be involved in discussions on the project, he said, mentioning Iran. Washington's anti-Tehran stance blocks Iranian routings for oil and gas pipelines from Central Asia.

During her visit, Ciller said Kazakhstan would receive a $300 million credit line from the state Turk Eximbank, on top of an existing $200 million line, of which $160 million has been used.