Kazakh state oil and gas company KazMunaiGas and China National
Petroleum Corporation Thursday agreed to set up a joint company to
build a Kazakh-Chinese natural gas pipeline in 2008-2009, the Kazakh
energy firm said.
The Kazakh and Chinese state energy firms agreed to set up a
joint enterprise to implement the gas pipeline project and will own the
pipeline, KazMunaiGas, or KMG, said in a statement, adding that the
joint company will be equally owned by Kazakhstan and China.
The agreement that was signed Thursday also outlines the
main principles of the construction and use of the Kazakh-Chinese gas
pipeline, KMG said.
The agreement is the first step to fulfilling agreements
between the Kazakh and Chinese governments to build the
Kazakhstan-China gas pipeline, KMG said.
"The project's implementation will secure shipment of
transit gas to China and will allow the diversification of export
routes for Kazakh (natural) gas," KMG said.
The first part of the pipeline will be 1,333 kilometers long
and run from the Kazakh-Uzbek border to the Chinese border. The annual
shipping capacity will be 40 billion cubic meters, KMG said.
The second part of the gas pipeline will start from the
Caspian Sea area and will be 1,480 kilometers long and have an annual
shipping capacity of 10 bcm. It will be added to the major part of the
pipeline if it proves economically viability, KMG said.