Pipeliners

MOSCOW, March 2 (RIA Novosti) - The profitability of the Caspian Pipeline Consortium (CPC) is the main premise for the project to expand, Russian Industry and Energy Minister Viktor Khristenko opined during the talks with CPC stockholders in Astana the day before, according to a press release by the Russian Industry and Energy Ministry. "The consortium's profitability, timely payment of dividends to its shareholders and taxes to the CPC member-states' budgets are the key prerequisites for expanding CPC. This is the joint position of Russia and Kazakhstan," Mr. Khristenko said. Commenting on the outcome of the negotiations, he noted that "the shareholders agreed on the basic principles of the CPC expansion, pricing issues and expenditure control." The ministry mentioned that CPC was the first major pipeline in the former Soviet Union, whose construction involved probate investments. The pipeline connects the Tengiz oilfield in western Kazakhstan and the export terminal on the Black Sea coast near Novorossiisk. Launched in October 2001, CPC has exported over 50 million metric tons of crude, including 22.5 million metric tons in 2004. According to Mr. Khristenko's opposite number, Kazakh Energy and Mineral Resources Minister Vladimir Shkolnik, CPC shareholders agreed on boosting the pipeline's throughput capacity from 28 million metric tons of oil to 67 million metric tons and increasing the oil transportation price from $27 per ton to $29.5 per ton. According to Mr. Shkolnik, the conference in Astana allowed its participants to come up with a joint approach to pricing, reach agreement on the fundamentals of the expansion and work out a joint approach to "control over expenditure - both operating and capital expenditure caused by the CPC expansion. "We disagreed on how to achieve this," Mr. Shkolnik noted, adding that the shareholders were to convene in Moscow in early April to finalize the memorandum on the principles of the CPC expansion. "Launching the CPC expansion is very important to us," Mr. Shkolnik emphasized.