Pipeliners

01-15-2006 By Ian MacWilliam BBC News –  AlmatyKazakhstan and China have inaugurated a 1,000km-long (620-mile) oil pipeline to supply Kazakh oil to energy-hungry western China. It is the first major export pipeline from the landlocked Central Asian republic which does not cross Russia. It will eventually export oil to feed China's booming economy from huge reserves around the Caspian Sea. Kazakhstan wants to become one of the world's top oil exporters in the next decade or two.
Huge oilfields
Kazakh President Nursultan Nazarbayev pushed a ceremonial button to start filling the new pipeline with Kazakh crude, marking a new stage in his country's emergence as an oil exporter. Construction began last year on the pipeline from Atasu in central Kazakhstan to Alashankou on the Chinese border. It should be fully operational by the middle of next year, providing a new source of oil for China to develop its western Xinjiang region. Eventually another pipeline will link up with this one from the Caspian region in west Kazakhstan, where the huge new Kashagan oilfield is being developed. With the help of Western oil companies, Kazakhstan has doubled its production to more than a million barrels a day since the collapse of the Soviet Union. That puts it among the world's top 20 oil producers now, but Kazakhstan has ambitions to triple this amount in the next decade or two.
Growing leverage
Until now the country has had to export most of its oil through two pipelines on Russian territory. This meant that ultimately it was Moscow's hand on the tap and Russian policy has been to use its control over oil and gas pipelines to pursue its own interests in Central Asia. Kazakhstan will gain significant leverage in future deals once it has an alternative export route and a thirsty new market. Kazakhstan is also in talks about exporting its oil through the new Baku-Ceyhan pipeline from the Caspian to the Mediterranean which opened earlier this year. Oil pundits say the more export routes there are from this once inaccessible region, the better for customers and for the oil producers themselves