KazMunaiGaz to increase its stake in the CPC project
Kazakhstan National Company KazMunaiGaz agreed to pay BP PLC $250 million for its 49.9% stake in Kazakhstan Pipeline Ventures, which holds a 1.75% interest in the Caspian Pipeline Consortium (CPC). KazMunaiGaz already owns the remaining share of the venture. The deal, signed on April 30th, 2009, raises Kazakhstan’s stake in the CPC to 20.75% and will increase the access rights of KazMunaiGaz to 14.3 million tons per year after completion of the expansion project.
It should be mentioned that the shareholders in the Caspian Pipeline Consortium agreed in December, 2009 on plans to double the line's capacity.
BP, previously the only shareholder that opposed the terms of the CTC capacity enlargement, initially alleged that it was considering selling the stake to any interested party. BP was in talks with LUKOIL and KazMunaiGas to sell its stakes in its joint ventures with the Russian and Kazakhstan companies, LUCARCO (46% stake) and Kazakhstan Pipeline Ventures, which are members of the Consortium.
The 1,510-km pipeline, which connects giant Tengiz oil field in Western Kazakhstan with the Russian Black Sea port of Novorossiysk, currently transports 28.2 million tons annually. After work on expanding the pipeline has been completed, CPC's capacity is expected to reach 67 million tons of oil per year, with the majority of its capacity reserved for oil extracted in Kazakhstan.
South Korea to take part in the development of Kazakhstan’s petrochemical industry
LG Chemicals Ltd, South Korea’s biggest chemicals producer, is in talks with Kazakhstan to participate in the construction of a USD5.3 billion petrochemical plant in the Atyrau region of Western Kazakhstan. Moreover, several South Korean financial institutions are ready to finance the construction of this integrated petrochemical complex.
Kazakhstan’s Prime-Minister Karim Massimov alleged that Samruk-Kazyna National Welfare Fund and the National Company KazMunaiGas will hold active talks with investors from South Korea regarding their participation in the project.
The project is carried out by Kazakhstan Petrochemical Industries (KPI), equally owned by Sat & Company and KazMunaiGas Exploration Production which is a subsidiary of the National Company KazMunaiGas. The planned capacity of the complex amounts to 400k tons of low and high density polyethylene, 400k tons of linear low density polyethylene and 400k tons of polypropylene per year.
CNPC and KMG to jointly operate MangistauMinaiGas
As a result of interstate negotiations held during the state visit of Kazakhstan’s President Nursultan Nazarbayev, China National Petroleum Corporation (CNPC) will invest $3.3 billion together with National Company KazMunaiGas (KMG) in a deal to purchase MangistauMunaiGas (MMG), an independent Kazakhstan oil producer.
CNPC already owns two thirds of Kazakhstan's largest oil and gas producer PetroKazakhstan. It should be noted that KMG has bought a majority stake (50%+2 shares) in MangistauMunaiGaz, the country's fourth largest oil producer, from the British Virgin Islands-registered Central Asia Petroleum in January 2009.
CNPC also lent $5 billion to KMG to complete the transaction and to fund the construction of the Beineu-Bozoi-Akbulak domestic gas pipeline in southern Kazakhstan. Kazakhstan has excluded Pavlodar oil refinery from the deal. KMG alleged previously that it wanted full control of the refinery, one of Kazakhstan's three. It already controls the two other refineries.
Previously MMG, which controls oil reserves estimated at about 500 million barrels, has also been eyed by other national energy companies in recent months. Its two largest fields, Kalamkas and Zhetybai, hold around 88.8% of its extractable reserves
Kazakhstan is interested in the Baku-Supsa Pipeline
Kazakhstan wants to transport oil through the Baku-Supsa Pipeline running through Azerbaijan and Georgia to the Supsa terminal in the Black Sea, Kazakhstan officials said. The Ambassador of Kazakhstan to Azerbaijan, Serik Primbetov informed at the press conference, Kazakhstan is ready to transport oil through the pipeline Baku-Supsa.
On his side, Azerbaijani Ambassador to Kazakhstan Latif Gandilov said the pipeline would transport light crude from the Azeri-Chirag-Guneshli fields located about 75 miles off the coast of Azerbaijan in the Caspian Sea. Gandilov said Kazakhstan expressed interest also in building a new oil pipeline from the Baku ports in Azerbaijan to the Georgian Batumi ports in the Black Sea.
The 837 kilometer long Baku-Supsa oil pipeline with a diameter of 530 millimeters was constructed along with the development of the block Azeri-Chirag-Guneshli and it was put into operation on April 17th, 1999.
BP runs operations at the Azeri-Chirag-Guneshli fields, which boast an estimated 5 billion barrels of recoverable oil resources. Azerbaijani oil from the fields was transported through the Baku-Supsa line until 2006 when it was closed for repairs.
However, transportation from Azerbaijan has resumed. Transportation of Kazakh oil through the Baku-Supsa pipeline is not possible so far, as Rovnag Abdullayev, head of Azeri oil company SOCAR said. He added that presently the line is used exclusively for the transportation of oil from the Azeri Chirag-Guneshli field and it will be difficult to change the scheme of transportation.