- Title: KAZAKHSTAN: Kazakhstan opens oil pipeline to China
- Date: 15th December 2005
- Summary: WIDE OF KAZAKH AND CHINESE OFFICIALS LOOKING ON
- Embargoed: 30th December 2005 12:00
- Keywords:
- Location: Kazakhstan
- City:
- Country: Kazakhstan
- Topics: International Relations,Energy
- Reuters ID: LVABYF8LM8XO0UJZ5QY1Z8M43RXV
- Aspect Ratio:
- Story Text: Kazakh oil started flowing into a new pipeline to China on Thursday (December 15), the first such route from an ex-Soviet state and the start of a project that could give Beijing direct access to Caspian Sea crude.
The pipeline, part-financed by energy-hungry China which has pledged to take responsibility for filling it with oil, is also a step towards breaking Kazakh dependence on its former imperial master Russia for export routes.
The line, from Atasu in central Kazakhstan to Alashankou in China's northwestern Xinjiang region, will initially transport up to 10 million tonnes (210,000 barrels per day) of Kazakh and Russian oil to China.
But that trickle, still dependent on Russia's participation due to a huge gap in Kazakhstan's pipeline network, could become a flow once further pipelines are built westward to the Caspian.
"This is the start of a long road to bring big Kazakh oil to the East," Kazakh oil minister Vladimir Shkolnik said after President Nursultan Nazarbayev pressed a button in the capital Astana to start the crude flowing into the pipeline.
A pipeline opening ceremony was held in Atasu, a small village surrounded by vast expanses of frozen steppe, with red-clad Chinese oil workers standing to attention.
The vast Central Asian state's oil output is expected to nearly triple to 3.5 million bpd by 2015, making Kazakhstan an increasingly important player among world oil producers.
But its Soviet history and landlocked geography had made it reliant on Russia for export routes and prompted the government to seek alternatives.
China has courted the Kazakhs, buying oilfields and pressing for the oil pipeline, which Nazarbayev said could later be followed by a natural gas pipeline.
Officials said the $806 million, 960-km (600 mile) long pipeline would initially be filled with crude from Aktobe in northwestern Kazakhstan, where China operates an oilfield, and Russian oil from Siberia.
Due to the gap in its pipeline network, the oil from Aktobe will be brought to Atasu by rail.
There are plans to fill that gap by 2011, when Kazakhstan's offshore Caspian Sea projects are due to be on stream, giving China direct access to the region's most promising oil supplies.
The new pipeline will also allow China National Petroleum Corp, which this year bought Canada's PetroKazakhstan, to pump oil from the Kumkol fields it now owns, once the direction of an existing pipeline running to Atasu has been reversed.
The Atasu-Alashankou pipeline will double capacity to 20 million tonnes a year after 2010, officials said, and this could be further increased once the gap, between Kenkiyak and Kumkol, is plugged.
Nurbol Sultan, a deputy director general at state-owned transport company KazTransOil, told reporters that building the Kenkiyak-Kumkol line, roughly 700 km long, would comprise the second stage of the Kazakhstan-China oil route.
"Once the second stage of the project is implemented, it will be technically feasible to boost the pipeline's annual capacity to up to 50 million tonnes of crude," he said. "It will all depend on the suppliers of oil." (One tonne of Kazakh crude = 7.6 barrels) - Copyright Holder: REUTERS
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