Kazakh President Nursultan Nazarbayev announced June 6 that he had reached an agreement with U.S. energy supermajor Chevron on the first leg of a pipeline system that has the unstated aim of diverting the majority of Kazakhstan's oil exports away from Russia. It is difficult to overstate the implications of such a development. Russia uses its Soviet-era petroleum transport systems to maintain a stranglehold on the economic and political life of the Central Asian states. Meaningful alternative shipping routes have so far been small in volume and long in coming. In part this is because the Russian routes are present and available, and in part because the region's remote — and landlocked — location makes infrastructure and oil development very expensive. But change, while slow in coming, has still come. In 2006 a BP-led consortium opened a line from Baku, Azerbaijan, to Ceyhan, Turkey (BTC). Also under development is a Chinese option that is shipping increasing volumes of crude east. If it is realized, the Chevron project will dwarf them all. First, it explicitly taps Kazakh crude, unlike the BTC which predominately transports the less geographically-complicated Azerbaijani crude. Second, it is massive. The Chinese line can only handle about 200,000 barrels per day (bpd) at present. At maximum capacity the Chevron line will transport approximately 1.1 million bpd. The project is hardly in the bag, however. While Chevron has confirmed its participation in the project, there are still the pesky details of arranging financing, selecting the route and fending off the Russians. Financing will be the least troublesome of these challenges. If a big fish like Chevron cannot get a dollop of loans for an oil project when crude is selling above $130 a barrel, no one can. The route will be trickier. So far Chevron has only publicly committed to the $1.5 billion first stage of the project, which will ship oil from Tengiz to Kazakhstan's tanker port of Karyk. From there one of two things will have to happen. Either a second leg will need to be built under the Caspian to Baku, or a small fleet of shuttle tankers will need to unload the oil at Karyk and steam over to Baku to load it into the BTC. After that, the third and most expensive part of the plan must be built. The BTC is "only" able to ship 1 million bpd, so if Chevron's plan is to be fully implemented the BTC must be doubled in capacity. All told the complete price tag will probably edge up near $10 billion. (A consortium of interested companies will almost certainly be assembled for phases II and III — perhaps even phase I — to help manage the cost.) But the real thorns will come in dealing with the Russians. Chevron's primary rationale for building this alternate route via Karyk is due to Russia's attitude toward the export route Chevron currently depends on: a patched-together linkage of old and new infrastructure collectively known as the Tengiz-Novorossiysk pipeline (CPC). For years Chevron has been attempting to increase the line's capacity to handle additional Kazakh volumes, but it has faced numerous Russian objections (many in the Kremlin do not want the Central Asian states exporting any petroleum). More recently, Russia has attempted to make the CPC — currently managed by a broad consortium of governments and firms — a wholly operated (and likely owned) asset of the Russian government. It appears that Russia's 11th-hour attempts to keep Kazakhstan interested have failed to sway Chevron. Putting aside Chevron's smarting at likely losing a critical flagship piece of equipment, Chevron no longer trusts its regional business plans to the murky world of Kremlin strategic planning and internal politics. Russia, of course, is not even remotely a disinterested observer. The proposed line expressly flies in the face of Russian national interests; it financially empowers Kazakhstan (a state Moscow thinks of as its personal stomping ground), snakes through Georgia (a patch of territory that rarely passes up an opportunity to rile Moscow), terminates in Turkey (a strategic rival) and supplies Europe (a region that Russia feels it must maintain leverage over). Russia's tools for dealing with its newfound problem are nearly as numerous as the complications the line has raised. Most obviously, Russia can hold the CPC — currently Chevron's primary export route — as ransom. Shadier options include pressuring the Kazakh government behind the scenes, something that can involve everything from a foreign minister making a trip to visits from more cloak-and-dagger agencies. Another option would be triggering crises in Georgia that would threaten directly the BTC (something that STRATFOR is more than a touch surprised has not happened already).