07ASTANA986, KAZAKHSTAN FLOATS IDEA OF CHINA-CASPIAN ENERGY /

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Reference ID Created Released Classification Origin
07ASTANA986 2007-04-18 03:10 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8738
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #0986/01 1080310
ZNR UUUUU ZZH
P 180310Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9109
INFO RUCNCIS/CIS COLLECTIVE 0131
RUEHBJ/AMEMBASSY BEIJING 1307
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUEBAAA/DEPT OF ENERGY WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 000986 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EB/ESC; SCA/CEN (O'MARA) 
 
E.O. 12958: N/A 
TAGS: ENRG EPET KZ
SUBJECT: KAZAKHSTAN FLOATS IDEA OF CHINA-CASPIAN ENERGY / 
TRANSPORTATION CORRIDOR 
 
REF: A. ASTANA 943 
     B. ASTANA 908 
 
1. (SBU) Summary:  The GOK is floating the idea of an "energy 
transportation corridor" running from China to the Caspian 
through Southern Kazakhstan, which would consolidate oil and 
gas pipelines, railroad tracks, highways, electricity 
transmission lines and generating plants, and 
telecommunication lines along a single right-of-way. 
Presidential Advisor Serik Burkitbayev distributed a 
description of the project at the April 5 Interim Session of 
the Foreign Investors' Council (FIC), soliciting FIC member 
company support and telling them that the proposal would be 
on the agenda of the Summer 2007 FIC Plenary Session, chaired 
by President Nazarbayev. On April 7, Yerlan Sagadiyev, 
Advisor to the Prime Minister, highlighted the potential of a 
"multi-modal" transportation corridor, extending across the 
Caspian and beyond, to cut the transit time of Chinese goods 
to Europe by eleven days (Ref A).  End Summary. 
 
GOK Document Describes Corridor Concept 
--------------------------------------- 
 
2. (SBU) Presidential Advisor Serik Burkitbayev distributed a 
document (marked "confidential") describing a 
"Trans-Kazakhstan Energy Corridor" to FIC members on April 5. 
 The document and supporting maps describe an integrated 
transportation/energy/telecommunications corridor extending 
from the Kazakhstan-China border near Dostyk, through the 
population centers of Almaty and Shymkent, and then Northwest 
to the tip of the Aral sea, where the corridor bifurcates, 
with one leg running West to the Caspian port of Aktau, and 
the other leg running Northwest to the vicinity of Uralsk, on 
the Kazahstan-Russian border. The corridor would consolidate 
highways, oil and gas pipelines, railways, power transmission 
lines, water pipes, and telecommunication lines along a 
single right-of way, "saving both capital costs and service 
infrastructure expense."  Project cost is estimated at $20-25 
billion, with phased completion in 2007-2009 and 2012-2015. 
The document notes that the corridor will interface naturally 
with the European TRACECA ("Transport Corridor 
Europe/Caucuses/Asia") project. 
 
3. (SBU) The document envisions that construction of the 
corridor will spur the development of "a number of complexes 
for energy-intensive production" (cement, glass, fertilizer, 
and high-tech metallurgical production are mentioned), with 
resulting shifts in population, creating communities akin to 
"Silicon Valley" and the "IT Corridor in Malaysia."  The 
project is also touted as a solution to Southern Kazakhstan's 
energy supply issue. (Note: The document emphasizes that many 
of the corridor's component parts are already under design or 
construction.  The corridor does parallel one possible 
pathway for the proposed Turkmenistan-Kazakhstan-China gas 
pipeline, rumored to be favored by the GOK in order to 
provide gas supplies to Almaty and other Southern population 
centers.  End note.) 
 
4. (SBU) The document calls for the creation of additional 
infrastructure along the corridor, including terminals and 
logistics centers on the Caspian Sea, as well as on the 
border with Uzbekistan, Russia, and China.  Private investors 
are invited to participate in the construction of the 
infrastructure, as well as to contemplate building their own 
"specialized rolling-stock," as well as transit and warehouse 
terminals at border locations. 
 
5. (SBU) In an April 7 conversation with the Ambassador, 
Sagadiyev emphasized the corridor as a cost-effective way to 
deliver Chinese goods to the European market.  According to 
his vision, the corridor would extend to cross-Caspian 
shipping and beyond, cutting the potential delivery time for 
Chinese goods to Europe by eleven days.  Sagadiyev noted that 
the corridor would be particularly well-suited for perishable 
Chinese goods, such as wheat, the transit potential of which 
he estimated at 20 million tons annually. 
 
6. (SBU) Comment:  We do not know the origins of this 
corridor concept, but it appears to have caught the 
imagination of the Kazakhstanis -- and presumably, of the 
Chinese as well. When combined with the Prime Minister's 
recent remarks to the Ambassador that Kazakhstan was pursuing 
a transportation "union" with Azerbaijan, Georgia, and Turkey 
 
ASTANA 00000986  002 OF 002 
 
 
(Ref B), this news leads us to conclude that the GOK is 
intent on improving transportation efficiencies and 
capitalizing on Kazakhstan's geographical position as a 
natural transit country.  End comment. 
ORDWAY

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