Official opening of Caspian oil pipeline

Nov 28, 2001 01:00 AM

Energy officials from Russia, Kazakhstan and Oman joined international oil company executives for the official opening of the pipeline connecting Kazakhstan's Tengiz oil field with an export terminal in this southern Russian port. The ceremony to inaugurate the $ 2.65 bn US pipeline, the largest foreign investment in Russia to date, came amid a slump in world oil prices and demands by OPEC that producers cut back.

Russian First Deputy Energy Minister Ivan Matlashov, Deputy Kazak Prime Minister Vladimir Shkolnik and Omani National Economy Minister Ahmed Macki were expected to attend the official launch of the Caspian Pipeline Consortium project. US companies have invested more than $ 1 bn in the consortium, which is running a 1,580 km pipeline from the Tengiz oilfield in western Kazakhstan to the Russian Black Sea port of Anapa. The consortium includes the Russian, Kazak and Oman governments, Chevron, Arco, Shell, Mobil and Agip, as well as smaller firms.

The Tengiz field is believed to be theworld's sixth-largest oilfield. The pipeline has an initial capacity of 600,000 bpd and, if upgraded, it will ultimately have an annual capacity of 1.5 mm bpd.
ChevronTexaco, the big US oil company, financed 30 % of the project and will be the biggest customer for the pipeline. The pipeline was originally scheduled to begin full operations in August, but the opening was postponed over customs and oil quality disputes.
The Russian government has said it expects to collect more than $ 20 bn in taxes over the next four decades from the pipeline. The pipeline is also expected to give Moscow political clout in the strategic and mineral-rich Caspian region.

Source: The Canadian Press
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