Project for CPC expansion to be launched in Atyrau on July 1

June 21. Interfax-Kazakhstan. Astana

Project for CPC expansion to be launched in Atyrau on July 1The project for expansion of CPC oil pipeline will be officially launched in Atyrau next week, National Company KazMunayGas says in a Tuesday press release.

The first weld on the pipeline line will be made at the oil pumping station in Atyrau on July 1, the press release says.

The ceremony will be attended by Kazakh Minister of Oil and Gas Sauat Mynbayev, Russian Energy Minister Sergei Shmatko, CPC General Director Nikolai Platonov, KazMunayGas CEO Kairgeldy Kabyldin, Transneft CEO Nikolai Tokarev and other officials.

The CPC operates the 1,511-kilometer Tengiz-Novorossiisk oil pipeline. The company’s sovereign shareholders are Russia with 31% of the shares (stake is managed by Transneft (24%) and CPC Company – (7%)) and Kazakhstan with 20.75% (stake is managed by KazMunaiGas (19%) and Kazakhstan Pipeline Ventures LLC (1.75%)). The rest of the consortium belongs to private companies: Chevron Caspian Pipeline Consortium Company (15%), LUKARCO B.V. (12.5%), Rosneft-Shell Caspian Ventures Limited (7.5%), Mobil Caspian Pipeline Company (7.5%), Eni International (N.A.) N.V. (2%), BG Overseas Holding Ltd (2%) and Oryx Caspian Pipeline LLC (1.75%).

The consortium increased oil exports 9.9% in 2009.

According to the CPC, the project will cost $5.4 billion. Earlier estimates of the project’s cost were $2 billion in 2005, $2.5 billion in 2007 and over $3 billion in 2008. The expansion is meant to boost the throughput capacity of the pipeline from 32 million to 67 million tons or 76 million tons (if anti-friction additives are used).

The yearly revenue of the CPC after 2015 may reach $2.5 billion. The return on investment will be achieved in 2018-2019. By that time the current debts of $4.6-4.7 billion will be repaid. The CPC plans to start dividend payments to shareholders in 2018-2019.

34.9 million tons of oil was shipped through the CPC sea terminal in 2010, exceeding the figure of 2009 by 500,000 tons.