CNPC, KazMunaiGas Begin Phase 2 Construction on Gas Pipeline

BEIJING (Dow Jones)

China National Petroleum Corp. and Kazakhstan's national oil and gas company KazMunaiGas Tuesday began construction on the second phase of the China-Kazakhstan natural gas pipeline project, which will link western Kazakhstan with the Central Asia Gas Pipeline, CNPC said in an in-house newsletter Wednesday.

This move marks a recent effort by China to tap more natural gas resources from Kazakhstan, by shipping natural gas produced from the Aktobe field in western Kazakhstan to China through the Central Asia Gas Pipeline.

The 1,475-kilometer pipeline in Kazakhstan will have an annual transmission capacity of 10 billion cubic meters, which could be expanded to 15 billion cubic meters.

CNPC and KazMunaiGas signed an agreement in June on the design, financing, construction and operation of the natural gas pipeline, which will also help meet demand in southern Kazakhstan.

The project consists of two sections. The first is from Shymken to Bozoi, with a length of 1,164 km and an initial transmission capacity of 6 billion cubic meters per year, operational at the end of 2012.

The second section comprises a 311-km line connecting Bozoi with Beyneu and work on it will involve building compressor stations, which will have a transmission capacity of 10 billion-15 billion cubic meters per year, CNPC said.

The project will be built and operated by a joint venture of CNPC and KazMunaiGas, it added.

(Wan Xu contributed to this article.)

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