Batumi Oil Terminal, which is part of the Greenoak Group, signed a deal with Kazakh state-run KazMunaiGas to set up a joint company to secure the flow of more Kazakh crude oil.

The agreement on the joint company, which is to be called Batumi Terminals, was signed by Jan Bonde Nielsen, chairman of the Batumi Oil Terminal, and Uzakbai Karabalin, the President of KazMunaiGas, on September 22 in Tbilisi.

Jan Bonde Nielsen said that the volume of crude oil and refined products from Kazakhstan, Azerbaijan and Turkmenistan handled by Batumi Oil Terminal has grown by nearly 4 times since 1999, and it “will load a record 12 million tons from Batumi this year.”

But he noted that with the Baku-Tbilisi-Ceyhan oil pipeline in operation, the Batumi Oil Terminal will now handle less crude from Azerbaijan.

“To ensure continued growth it has been our ambition for some time to find a partner strongly backed by resources… The true potential for Batumi lies with Kazakhstan, where oil production will, by 2015, grow to 170 million tons per year,” Jan Bonde Nielsen said.

Uzakbai Karabalin said that the new venture is “very important” for Georgia “as it will secure a stable flow of oil via this transit corridor."

“The Batumi Oil Terminal provides more than 60% of the income for the Georgian Railway… Falling volumes would have catastrophic consequences for both Batumi and the Georgian Railways,” he said.

The KazMunaiGas top executive also said that he has met with Georgian Prime Minister Zurab Nogaideli and informed him about the new venture.