Kazakhstan Starts Phase One of Kenkiyak-Atyrau Pipeline

Oil has begun flowing through the first phase of the Kenkiyak-Atyrau pipeline that will link fields in the western Aktobe and Atyrau regions with existing systems, the Atyrau-Samara pipeline and the Caspian Pipeline Consortium system from Tengiz to Novorossiisk. The pipeline is 24 inches in diameter and is 279 miles long. The capacity of the first strand of the pipeline was planned at 6 million tons of oil per annum; the second strand, which is scheduled to being transporting oil in 2004, is 9 million tons and the third phase, scheduled for 2006 will transport 12 million tons.

KazMunaiGaz and CNPC signed an agreement for the construction of the Kenkiyak-Atyrau pipeline in 2001. The parties set up Northwestern Pipeline Company MunaiTas in October 2001 to implement the project. The general contractor for this project was a division of Gazprom, Stroitransgaz, and the subcontractor was Kazstroiservis.

The Kenkiyak-Atyrau pipeline is an important element in the implementation of the Western Kazakhstan-China global export project that is of strategic importance to the republic. In particular, in 2005 MunaiTas plans to use the pipeline in reverse as the main section of the Kazakh-Chinese transcontinental oil pipeline to supply 15 million tons of oil per annum to northern China, under a Kazakh-Chinese intergovernmental agreement.

Currently, oil produced by CNPC-Aktobemunaigaz at the Zhanazhol and Kenkiyak fields is transported through the Aktobe-Orsk pipeline to Russia, by rail to China and also through the port of Aktau on the Caspian.

CNPC-Aktobemunaigaz, in which China National Petroleum Corporation owns over 60% of the shares, produced over 4.3 million tons of oil in 2002. The company plans to increase production to 5.2 million tons in 2003. It is forecast that in 2005 the company's production will amount to 5.5 million tons. Kazakhstan produced 47 million tons of oil in 2002 and plans to increase this to 52 million tons in 2003.