Kazakhstan expands China oil pipeline link

Jul 03, 2009 02:00 AM

Kazakhstan said it had completed the expansion of a major oil pipeline to China. A Kazakh company in charge of the project said the first test shipment of oil had been successfully completed through the newly built Kenkiyak-Kumkol pipeline.
"The implementation of this project will have tremendous influence on the whole oil and gas industry, providing new opportunities for oil exports," KazStroyService said.

The first phase of the pipeline, between central Kazakhstan and China's western Xinjiang region, was completed in 2006. The latest link expands this pipeline to Caspian Sea oil fields.
Chinese oil companies such as CNPC own stakes in several Kazakh oil producers, including CNPC-AktobeMunaiGaz, the operator of Kenkiyak and Zhanazhol fields, and PetroKazakhstan, which operates the Kumkol group of fields.

Kazakhstan, hit hard by the global economic crisis, has stepped up contacts with China for fresh investment. Kazakhstan and China agreed to build the 3,000 km pipeline in 1997 and have said they would later double the capacity of the combined pipeline from the current 10 mm tpy.
Kazakhstan, which produced 71 mm tons of oil last year, plans to double output within the next decade and seeks to diversify its exports as well as sources of investment in the industry dominated by Western oil majors.

China is also building a pipeline to import up to 40 bn cm of Central Asian gas a year.
The link originates in Turkmenistan and goes through Kazakhstan and Uzbekistan.

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