Caspian Pipeline

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Caspian Pipeline transports Caspian oil from the Tengiz field to the Novorossiysk-2 Marine Terminal on Russia's Black Sea coast. It is also a major export route for oil from the Kashagan and Karachaganak fields. It's the only oil export pipeline in Russian territory not wholly owned by Transneft. It is associated with the Caspian Pipeline Consortium (CPC), a group of national, local, and private organizations involved in ownership and operations of the Caspian Pipeline.[1]

Location

The pipeline runs from Tengiz oil field, Kazakhstan, to Novorossiysk-2 Marine Terminal, Russia.

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Project Details

  • Operator: Transneft (24%), Samruk-Kazyna (19%), Chevron (15%), LukArco (12.5%), Mobil (7.5%), Rosneft (7.5%), CPC Corporation (7%)
  • Owners: Transneft (31%), Samruk-Kazyna (19%), Chevron (15%), Lukoil (12.5%), ExxonMobile (7.5%), Rosneft (3.75%), Royal Dutch Shell (5.5%), Eni S.p.A. (2%), BG Group (2%), KazMunayGas (0.875%), and BP (0.875%)[1]
  • Current capacity: 1.34 million barrels per day
  • Length: 1,510 kilometers (940 miles)
  • Status: Operating
  • Start Year: 2001, 2017 (expansion)

History

CPC was initially created in 1992 as a development by the Russian, Kazakhstani and Omani governments to build a dedicated pipeline from Kazakhstan to export routes in the Black Sea. Chevron Corporation was asked to join; however, talks broke down due to the high financial burden Chevron would have to take on relative to equity in the pipeline. Progress on the project stalled for several years until 1996 when a restructure included eight production companies in the project. Among the companies were Chevron, ExxonMobil, LUKoil, Royal Dutch Shell and Rosneft. BP joined the consortium in 2003. Shares were divided fifty-fifty between the three states and the eight companies. Production companies financed the construction cost of US$2.67 billion, while the Russian Federation contributed unused pipeline assets worth US$293 million.[1][2] First oil was loaded onto a tanker at the Novorossiysk Marine Terminal on 13 October 2001 and the first stage of the pipeline was officially inaugurated on 27 November 2001. Regular operations started in April 2003.

In April 2007, the Russian government transferred its shares to the Russian state-owned oil pipeline company Transneft.[3] In October 2008, the Government of Oman sold its 7% stake to Transneft at a price of $700million and withdrew from the project.[4] On 17 December 2008, a memorandum on expanding the pipeline was signed.[5] In 2008, CPC transported 31.5 million tons of crude, down from 32.6 million tonnes in 2007. In the first three months of 2009, the pipeline transported 8.7 million tonnes of oil.[6]

Technical features

The diameter of the 1,510-km long oil pipeline varies between 1,016 mm and 1,067 mm. There are five pumping stations. The marine terminal includes two single point moorings and the tank farm consists of four steel storage tanks of 100,000 cubic meters each. Pipeline throughflow started at 350,000 barrels per day and has since increased to 700,000 barrels per day.[2][7]

An envisaged second stage will add 10 pumping stations for a total of 15. The number of tanks will increase to ten and one more mooring will be constructed. Capacity will increase to 1.3 million barrels per day. The second stage has been estimated to cost around US$2 billion and will be completed by 2012.[2][7][8][9]

Third Stage Expansion, Project Details

  • Operator: Transneft (24%), Samruk-Kazyna (19%), Chevron (15%), LukArco (12.5%), Mobil (7.5%), Rosneft (7.5%), CPC Corporation (7%)
  • Owners: Transneft (31%), Samruk-Kazyna (19%), Chevron (15%), Lukoil (12.5%), ExxonMobile (7.5%), Rosneft (3.75%), Royal Dutch Shell (5.5%), Eni S.p.A. (2%), BG Group (2%), KazMunayGas (0.875%), and BP (0.875%)[1]
  • Current capacity: 320,000 barrels per day
  • Length:
  • Status: Proposed
  • Start Year: 2023

Third Stage Expanion

In August 2019 the Consortium announced that the pipeline's capacity would be further expanded to 83 million tonnes per year by 2023.[10] In March 2020 the board of the Caspian Pipeline Consortium was dissolved after Transneft blocked the election of new directors in retaliation for the board's opposition to Transneft's plans to replace a marine services company at the CPC terminal in Novorossiisk with its own company.[11]

Consortium

The Caspian Pipeline Consortium was initially registered in the Bermuda Islands in 1992.[1] It is split into two companies: CPC-R operates the Russian section of the pipeline and CPC-K operates the Kazakh section.[1]

The shareholders of the consortium are:

  • Transneft - 31%
  • KMG International (a subsidiary of Samruk-Kazyna) - 19%
  • Chevron Caspian Pipeline Consortium Co. - 15%
  • LukArco B.V. (a subsidiary of Lukoil) - 12.5%
  • Mobil Caspian Pipeline Co. - 7.5%
  • Rosneft - Shell Caspian Ventures Ltd. (joint venture of Rosneft and Royal Dutch Shell) - 7.5%
  • Agip International (a subsidiary of Eni S.p.A.) N.V. - 2%
  • Oryx Caspian Pipeline LLC (a subsidiary of Royal Dutch Shell)[12] - 1.75%
  • BG Group|BG Overseas Holdings Ltd. - 2%
  • Kazakhstan Pipeline Ventures LLC (joint venture of KazMunayGas and BP)- 1.75%

Tengiz Field shareholders control 55.75% of the Consortium, Kasaghan shareholders control 33.1%.[1]

In December 2009, BP sold its stake in LukArco to Lukoil for $1.6 billion.[13][14]

Articles and resources

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Adrian Dellecker (June 2008). "Caspian Pipeline Consortium, Bellwether of Russia's Investment Climate? Russie.Nei.visions no.31" (PDF). IFRI. Retrieved on 2008-07-07.
  2. 2.0 2.1 2.2 . "Caspian Pipeline Consortium — a new global energy supplier" (PDF). Caspian Pipeline Consortium. Retrieved on 2008-11-22.
  3. "Transneft takes CPC bite". Upstream (newspaper). NHST Media Group. 2007-04-29. Retrieved 2008-07-07. Text "Upstream Online " ignored (help)
  4. "Russia snaps up Oman CPC stake". Upstream (newspaper). NHST Media Group. 2008-11-06. Retrieved 2008-11-09. Text "Upstream Online " ignored (help)
  5. "CPC Shareholders Sign Expansion Deal". Downstream Today. 2008-12-17. Retrieved 2008-12-25.
  6. "CPC pipeline exports up in 2009". Silk Road Intelligencer. 2009-04-06. Archived from the original on 2010-08-11. Retrieved 2009-04-06. Cite uses deprecated parameter |deadurl= (help)
  7. 7.0 7.1 "CPC Project Basic Features". Caspian Pipeline Consortium. Archived from the original on 2008-12-21. Retrieved 2008-11-22. Cite uses deprecated parameter |deadurl= (help)
  8. As of April 2018 the completion of the second stage had increased the pipeline's capacity to 67 million tonnes per year. "Russia's Transneft Could Take BP to Court over CPC". Downstream Today. 2008-11-19. Retrieved 2008-11-22.
  9. Caspian pipeline expansion boosts Kazakh crude exports, efe.com, Apr. 4, 2018https://af.reuters.com/article/energyOilNews/idAFL8N25B48X UPDATE 1-Caspian oil pipeline to expand capacity by a
  10. Caspian oil pipeline to expand capacity by a quarter by end-2023, Aug. 15, 2019
  11. Olga Yagova, CPC shareholders in standoff after Transneft blocks new board - sources, Reuters, Mar. 17, 2020
  12. Shippers Caspian Pipeline Consortium, accessed April, 2020
  13. Turner, Lorraine (2009-09-11). "BP says Lukoil buys out stake in CPC pipeline JV". Reuters. Retrieved 2009-09-12.
  14. "BP Sells Stake in Kazakh Tengiz Field, Caspian Pipe to Lukoil". Bloomberg. 2009-12-11. Retrieved 2009-12-11.

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External resources

Wikipedia also has an article on Caspian Pipeline Consortium (Caspian Pipeline Consortium). This article may use content from the Wikipedia article under the terms of the Creative Commons Attribution-ShareAlike 3.0 Unported License].

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