Pipeliners

ASTANA, February 21 (RIA Novosti) - Kazakh government might decide to increase the capacity of an oil pipeline managed by the Caspian Pipeline Consortium (CPC) up to 68 million tons per year as early as on March 1, announced on Monday Kazakh Energy and Mineral Resources Minister Vladimir Shkolnik during his speech in the lower chamber of the Kazakh Parliament. "On March 1, a large representative forum, with participation of Russian Energy Minister Viktor Khristenko and all CPC shareholders will be held in Astana. During the forum, we will adopt a final decision on the increase of CPC oil pipeline capacity," he stated. The Kazakh minister said that the increase of the CPC oil pipeline capacity was necessary due to the expansion of the second stage of the Tengiz field. "The field will see the increase of oil production output up to 20-30 million tons, the surplus oil will have to be transported somewhere else and we do not have an alternative other than increasing the capacity of the CPC pipeline," Mr. Shkolnik said. In addition, the Kazakh minister said, "we have to expand the CPC in order to make it profitable as soon as possible." Mr. Shkolnik noted that "there are strict requirements on the part of the Russian Federation, which owns 24% of the CPC stock, in terms of the increase of CPC oil transportation costs." At the same time, the minister stressed, "Kazakhstan is not particularly interested in doing it." "On the one hand, we own 19% of the CPC stock, but on the other hand we own 20% of Tengizchevroil (a company that conducts oil exploration at the Tengiz field). Therefore, we act simultaneously as consignors and transporters of goods," Mr. Shkolnik explained. The Kazakh energy minister said that "we have reached a consensus on this issue." The present capacity of the CPC pipeline is 28 million tons per year. The CPC was founded in 1992 by the governments of the Russian Federation, Kazakhstan and Oman. At present, 50% of the CPC capital belongs to foreign companies that are on the top ten list of global oil producers. The consortium was primarily formed to transport crude oil from the Tengiz oil field and neighboring oil fields in Kazakhstan and Russia to a newly constructed Novorossiisk-2 Marine Terminal on Russia's Black Sea coast.