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Kazakhstan-China oil pipeline could start operating at its full capacity by 2014

Energy Global,

Kairkeldy Kabyldin, the Director General of KazTransOil, has been cited as saying that the Kazakhstan-China oil pipeline will start working at its full capacity by 2014.

“Commercial talks are currently underway between Chinese and Kazakhstan representatives. We launched the oil pipeline with a capacity of 10 million tpy in 2005 and last year we increased it to 14 million tpy. The nominal capacity is 20 million tpy. According to the agreement with China, we are planning to bring Atasu-Alashankou section to 20 million tpy to ensure sufficient supplies to China,” Kabyldin said.

According to Kabyldin, at Atasu-Alashankou section the construction of two pumping stations has already begun this year. “We are in talks on the section from Atyrau to Alashankou to define the funding base and the commercial parameters and rates. We currently need around 100 billion tenge (US$ 667 million) to bring Atyrau-Alashankou section to 20 million t,” he added.

KazTransOil’s Director General did not exclude the possibility of using the funds received from implementation of the People’s IPO campaign. “The money from IPO will be first of all invested in reconstruction and modernisation of our assets that are 100% controlled by KazTransOil to ensure their efficiency. If we decide that Chinese project also gives a certain guaranteed investment payback, of course, we will see into the possibility of using the IPO money,” Kabyldin said.

The Kazakh government launched People’s IPO campaign earlier this year to offer shares to the public in major state-owned companies. Over 160 000 people are expected to take part in the programme, which is scheduled to be implemented until 2015 and provides for a gradual listing of shares of major and the most stable of the state companies. KazTransOil was nominated as the first to float it shares on the market on 1st October.

Kabyldin said at the time: “40 million shares of KazTransOil will be offered for sale to the citizens of Kazakhstan during the placement of stocks within the framework of the People’s IPO programme this fall. The initial stage of the company’s preparations for initial public offering has been completed.”

Edited from various sources by Cecilia Rehn.

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