The agreement was signed by General Counsel for the U.S. Trade and Development Agency James Wilderotter and President of Azerbaijan's State Oil Company Rovnag Abdullayev in the presence of Azerbaijan's Foreign Minister Elmar Mamedyarov and U.S. Assistant Secretary of State for Economic and Business Affairs Daniel Sullivan.
Wilderotter said during the signing ceremony that the grant has been allocated for a feasibility study of the project to connect Kazakh oil to the Baku-Tbilisi-Ceyhan oil pipeline across the bottom of the Caspian Sea, and the project on the gas pipeline to deliver natural gas to Europe from Kazakhstan and Central Asian countries.
Abdullayev said, in turn, that "The signing of the agreement is part of the dialogue between Azerbaijan and the United States within the framework of the energy security provision."
The 1,700-kilometer (1,000-mile) Baku-Tbilisi-Ceyhan oil pipeline, expected to start operating at full export capacity from 2008, pumps crude from Azerbaijan's fields off the Caspian coast via Georgia to Turkey, and onto Western markets.
The pipeline's capacity is 50 million metric tons (367 million barrels) of oil a year.