09/24/2008, 00.00
KAZAKHSTAN – GEORGIA

Kazakhstan steering a middle course between Russia and the West

In a quick succession Kazakhstan drops two large-scale projects in Georgia, a billion dollar oil refinery and a big grain terminal. Still the Kazakh military takes part in joint exercises with NATO as the country’s leaders seek closer ties to the West. China remains a wild card.
Astana (AsiaNews/Agencies) – Kazakhstan, a major foreign investor in Georgia, drops billion dollar plans in Georgia, citing political instability, but holds joint military exercises with NATO.

Today Kazakh state oil and gas company KazMunaiGas decided to pull the plug on a planned oil refinery in the Georgian port of Batumi. Company officials said that the decision was not political but due to technical problems that made it unfeasible.

For expert opinion though, Georgia remains essential for any oil and gas pipeline linking Central Asia to Europe without going through Russia. For this reason Moscow is opposed to any major oil refinery in the Georgian port, especially after the August war in the still Russian-occupied breakaway republics of Abkhazia and South Ossetia.

At the height of Georgia's conflict with Russia last month, Kazakhstan suspended oil shipments through Batumi but flows were restored in early September.

On Monday, Kazakh Agriculture Minister Akylbek Kurishbaev announced that his country would not go ahead with plans to build a grain terminal in another Georgian port, Poti, due to political uncertainty surrounding the country following its armed conflict with Russia.

The Poti terminal was expected to reach a capacity of 350,000-500,000 tonnes a year and would have provided Kazakhstan with another outlet for its grain. Last year the central Asian country had a bumper crop, harvesting a record 20.1 million tonnes of grain.

Georgia said it was "very surprised" by the announcement. Georgian First Deputy Economy Minister Vakhtang Lezhava said that “only Kazakh companies decided after the war to abandon investment plans in Georgia, while others continue to invest in our country.”

Owing to its geographic location and historical role Kazakhstan is an important ally for Russia, especially for overland trade routes. But Astana is also interested in developing good relations with the West. In fact “we want to bring cooperation with NATO to a new level,” Defence Minister Daniyal Akhmetov told reporters at a press conference.

Conversely, whilst Kremlin might be happy about the cancelled Kazakh investments in Georgia, few doubt that it liked yesterday’s joint Kazakh-NATO military exercises in the steppes near Almaty, exercises which took place whilst Russian President Dmitry Medvedev was visiting the Kazakh capital.

By the same token on 29 May, Kazakhstan reached an agreement of co-operation with Azerbaijan to send Kazakh oil through the Baku-Tbilisi-Ceyhan pipeline, thus avoiding Russian territory.

Astana also did not follow Moscow’s lead in recognising the independence of Abkhazia and South Ossetia

But it is developing closer ties with China. In July work began on the Kazakh leg of the 1,300 km China-Central Asia gas pipeline which, on completion, will run through the entire length of Central Asia, linking Turkmenistan to China via Kazakhstan and Uzbekistan. (PB)

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