Almaty(Kazakhstan) (AP): Kazakhstan and Azerbaijan agreed to set up an oil transport system across the Caspian Sea that will help get Central Asia's massive energy reserves to western markets and circumvent Russian territory.

The network will rely on a fleet of tankers and barges to bring Kazakh oil to Azerbaijan, the starting point for the 1,770-kilometer pipeline that traverses the South Caucasus and ends at the Turkish port of Ceyhan.

Kazakh state energy company KazMunaiGas said yesterday the network will be able to ship 500,000 barrels of oil a day at first eventually growing to 1.2 million barrels per day.

The company did not say whether where the ships would come from or who would build them or operate them. Most of the tankers plying the Caspian now are outdated and it would take years to build a sizable fleet to handle that much Kazakh oil.

Kazakhstan is almost exclusively reliant on transit routes through Russia for exporting its oil and Moscow has been reluctant to expand its pipelines. It is expected to start production at its giant Kashagan field on Caspian's northeast shores by 2013 which will further increase demand for export routes.

"It provides stability long-term, both so the Azeris can plan how to expand the BTC pipeline capacity ... and the Kazakh side can be provided some certainty that there is going to be an export route available to them," said Andrew Neff, an analyst with Global Insight.

Kazakh and Azeri authorities have also floated the idea of building a pipeline route across the Caspian, but disagreements over marking the borders across the sea have hampered progress.