Baku Brings East And West Together As Middle Corridor Becomes More Significant

(MENAFN- Trend News Agency) BAKU, Azerbaijan, March 29. Azerbaijan is not only becoming the most significant transport hub between China and the EU but is also launching a new project that completely predetermines the economic development of the entire region.

Recently, the first shipment of crude oil from the Kashagan field in Kazakhstan was delivered to Baku on the tanker Academician Khoshbakht Yusifzadeh, owned by the Azerbaijan Caspian Shipping Company CJSC, along the Aktau-Baku route.

The tanker, carrying the first batch of 6,900 tons of crude oil, left the Kazakh port of Aktau and arrived at the Sangachal terminal. The owner of the oil shipped by KazTransOil, the operator of the main oil pipelines in Kazakhstan, is the Japanese Inpex North Caspian Sea, Ltd.

According to Hiroshi Ikeda, Director of the Inpex North Caspian Sea, Ltd. branch in Kazakhstan, the first test shipment confirmed the possibility of increasing the number of export routes for 'Kashagan' oil by rail in the direction of the Trans-Caspian route.

Prior to this, Kazakhstan supplied crude oil to European markets through the territory of the Russian Federation. However, artificial problems seemed to constantly arise along this route. For instance, in March last year, the transportation of Kazakh oil through the territory of Russia was suspended. The reason was the damage to the oil terminal in the port of Novorossiysk after the hurricane. After this incident, official Moscow stated that it would take about two months for the terminal to repair the damage.

In addition, from January through February 2023, KazTransOil sent 325,900 tons of oil to the Russian port of Makhachkala. This oil was subsequently transported via the Makhachkala-Tikhoretsk-Novorossiysk oil pipeline.

It may seem that 6,900 tons of oil are a very small, even microscopic volume in terms of 'black gold' tanker shipments. Perhaps it is, but from a geopolitical and especially geo-economic point of view, this oil, supplied from Aktau to Sangachal, connects East and West, which means the launch of a new, efficient route on the economic map of a vast region.

This route is a project of the Trans-Caspian International Transport Route (TITR), known as the Middle Corridor. As part of this project, the expansion of the Baku port in the Alat Free Economic Zone, located 70 kilometers south of the capital of Azerbaijan, has been completed.

The Middle Corridor passing through Central Asia and the South Caucasus aims to increase the intensity of energy carriers and container traffic from East to West.

Unlike China's Belt and Road Initiative, to which once very high hopes were attached and which was almost declared the "biggest global project of the new century," the Middle Corridor is more concrete and efficient.

The first batch of test cargo successfully transported from the Chinese Central Railway Container Station Tuanjiecun (Chongqing) to Finland through Baku in May of last year serves as proof of this. The cargo, which belonged to Nurminen Logistics, was brought by ferry to the Romanian city of Constanța after being transported by rail through the Georgian port of Poti.

The road from Tuanjiecun station (Chongqing, China) to Helsinki, Finland, is 13,000 kilometers long.

Moreover, the Middle Corridor also offers the use of the Bulgarian port of Varna as an alternative to the Romanian port of Constanța for cargo bound from China to Europe.

Azerbaijan, China, Kazakhstan, and Georgia intend to develop the route of the Middle Corridor. According to expert estimates, the annual potential of the route is 10 million metric tons or 200,000 containers.

The four countries intend to establish single tariffs for local companies, as well as simplify the work of cargo transportation companies.

As a result of the war in Ukraine, China and Central Asia consider it risky to pass export routes through the territories of their "northern neighbor". This situation has greatly increased the economic and geopolitical importance of the Middle Corridor.

The volume of rail traffic on the China-Russia-Europe route increased in 2020-2021 by about 48.7 percent. But, now, due to the sanctions imposed by the West on Russia, there may be problems with transportation for Chinese goods on the main Russian transport routes, especially at ports and border checkpoints.

Moreover, Chinese companies that intended to invest heavily in the development and expansion of Russia's railway infrastructure are now seriously reconsidering it.

The Organization of Turkic States (OTS) has an exceptionally important role in the implementation of the Middle Corridor project. The project reached the level of a functioning route after reaching a mutual understanding between the countries included in this organization.

And when the second stage of expansion of the Baku port is completed, 25 million tons of cargo will be transported there annually, including 500,000 containers in 20-foot equivalent.

At the same time, the necessary infrastructure in the port has been created for 11 years.

Among the ports that have been developed, expanded, and modernized ports on the eastern coast of the Caspian Sea within the project, we should also mention Kazakhstan's Kuryk port and Turkmenistan's Turkmenbashi port.

If the annual volume of transshipment of the Kuryk port was 4.1 million tons or 240,000 containers in 20-foot equivalent, today this volume has increased to about 6 million tons. Since the Turkmenbashi port has a capacity of 4 million tons and 400,000 containers in 20-foot equivalent, at first glance, it can be considered small for real traffic volumes. And given that the Middle Corridor is developing rapidly, Turkmenistan's place and role in the project will increase many times.

The moment that makes it inevitable to realize the nuance we are talking about is the increase in sea freight rates compared to land transport in the context of change in global logistics routes.

The launch of the Middle Corridor, while the demand for energy carriers in the EU and other regions of the world is growing, significantly increases the attention to the TITR, and boosts the attention of the leaders of the world's energy industry to Azerbaijan, as well as to the route of the Trans-Caspian Gas Pipeline (TSGP) from Kazakhstan to Azerbaijan.

Baku's work, in recent years, related to the creation of a multimodal transit infrastructure in Azerbaijan has accelerated the implementation of new opportunities.

Currently one of the three commercial routes between China and the EU is the TITR, the length of which is 4,256 kilometers by road and rail, and 508 kilometers by sea.

A regular container train passing through the Middle Corridor delivers goods from China to Europe in an average of 20-25 days, which is a serious advantage.

By comparison, the transshipment of goods from China and Southeast Asia to the EU, through the Suez Canal, takes from 35 to 40 days.

Azerbaijan, which owns the largest marine fleet in the Caspian Sea (53 vessels), has become an international transport hub due to its location at the junction of Europe and Asia. Thereby, the volume of transit cargo transportation through Azerbaijan increased by 75 percent last year. This figure has been growing rapidly since the start of 2023.

China has also intensified within the Middle Corridor and begun construction of the China-Kyrgyzstan-Uzbekistan railway route, which will go to the eastern shore of the Caspian Sea, from where goods will be delivered by ferries to Baku.

Furthermore, the volume of traffic in reverse is also increasing from West to East. The Baku-Tbilisi-Kars railway route is being modernized, and the necessary work to increase the capacity to 5 million tons per year is scheduled to be completed in 2024.

The unification of customs documentation, the "single window" system, and the preparation of common principles within the tariff policy for the operation of the Middle Corridor at full capacity has also been accelerated.

All this increases both the commercial value and the geopolitical significance of the route.
Moreover, this will speed up the implementation of the Zangezur corridor project, since the corridor is the shortest transit route that can diversify transport routes between China, Central Asia and the EU.

The Middle Corridor will stimulate Azerbaijan's economic growth, as well as the development of the whole region. The corridor will become an additional tool of influence for establishing peace and stability in the region and will ensure uninterrupted cargo transportation to the countries of the EU.

Overall, the West and East are ready for closer cooperation in transit cargo transportation through Azerbaijan.


Trend News Agency

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