Kazakhstan, Astana, Dec. 25 / Trend A.Maratov /
The Novorossiysk Sea Port will calmly cope with new volumes of oil to received after the completion of the Caspian Pipeline Consortium (CPC) expansion project suggesting a twofold increase in the capacity, the Kazakh national Company KazMunayGas (KMG) reported.
"The CPC expansion project that passed the state examination identified further required number of tanks at the sea terminal, thus the port of Novorossiysk will calmly cope with the new volumes of oil after the CPC expansion project is completed," the company reported.
KMG reported that stoppage in the Novorossiysk port due to the weather conditions hit 281 hours (12 days) in 2009 and 454 hours (19 days) - in 2010.
Final Investment Decision (FID) to expand the CPC pipeline mechanical capacity to 67 MTPA was passed in Moscow on Dec.15. The document sanctions commencement of the work on expansion of the pipeline throughput.
The Decision defines all parameters of the Project: from financial, economic and Project Implementation Schedule to the HSE parameters. Construction is to begin in spring next year. Expansion is envisaged in three phases while completion of the Project is planned for 2014.
Estimated CPC Expansion Project cost is USD 5.4 bln. Financing of the Project and its ultimate profitability are guaranteed by the Ship or Pay Agreement under which Shareholders - Producer Companies undertake to use the expanded pipeline capacities. If the agreed delivery volumes are not reached, a relevant Producer Company commits to make payments to CPC in the amount of CPC's revenue shortfall.
CPC Expansion Project that envisages expansion of the pipeline throughput to 67 MTPA includes construction of 10 additional pump stations (2 in Kazakhstan and 8 in the Russian Federation), six crude oil tanks in the vicinity of Novorossiysk and a third single point mooring at CPC Marine Terminal, as well as replacement of an 88 km pipeline section in Kazakhstan.
The company reported that the terms of the "transport-or-pay" contract have been developed over the past two years and in 2010 was approved by all shareholders of the CPC, including KMG.
"That is, all the future capacities arising after the implementation of the expansion project are guaranteed by the "transport-or-pay" contracts," KMG reported.
The CPC-the Tengiz-Novorossiysk pipeline is of great importance for the development of large deposits in the Caspian region, including those developed by Russian companies. Mining companies in Kazakhstan and Russia will get the full value for their oil and reduce the cost of its transportation compared to alternative export routes.
CPC Shareholders: Russian Federation (represented by Transneft - 24% and CPC Company - 7%) - 31%; Republic of Kazakhstan (represented by KazMunaiGaz - 19% and Kazakhstan Pipeline Ventures LLC - 1.75%) - 20.75%; Chevron Caspian Pipeline Consortium Company - 15%, LUKARCO B.V. - 12,5%, Mobil Caspian Pipeline Company - 7.5%, Rosneft-Shell Caspian Ventures Limited - 7.5%, BG Overseas Holding Limited - 2%, Eni International N.A. N.V. - 2% and Oryx Caspian Pipeline LLC - 1,75%.