Caspian Pipeline Consortium

The Caspian Pipeline Consortium is a consortium and a pipeline to transport Caspian oil from 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. As of 2009, the CPC pipeline is the only oil export pipeline in Russian territory not wholly owned by Transneft.[1]

Caspian Pipeline Consortium
Location
CountryKazakhstan, Russia
General directioneast–west
FromTengiz field, Kazakhstan
ToNovorossiysk, Russia
General information
Typeoil
PartnersTransneft, Government of Kazakhstan, Chevron Caspian Pipeline Consortium Co., LukArco, Mobil Caspian Pipeline Co., Rosneft - Shell Caspian Ventures Ltd., Agip International (N.A.) N.V., Oryx Caspian Pipeline LLC, BG Overseas Holdings Ltd., Kazakhstan Pipeline Ventures LLC (KazMunayGas and BP)
OperatorCPC-R, CPC-K
Commissioned2001
Technical information
Length1,510 km (940 mi)
Maximum discharge700,000 barrels per day (110,000 m3/d)

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, Mobil, 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 December 2009, the shareholders approved the plan of expanding the capacity of CPC trunk pipeline up to 67 MMTA, which included an array of organizational, technical, financial and commercial matters.

On October 14, 2016, the crude oil from Kashagan oil field in Kazakhstan has started coming into the Caspian Pipeline Consortium’s system.[6]

On April 18, 2018, the last Pump Station of CPC Expansion Project - PS-2 in Kalmykia - was put into permanent operation.[7]

On May 21, 2019, the annual meeting of CPC shareholders adopted the Bottleneck Elimination Program (BEP), which provides for expansion of the Tengiz - Novorossiysk oil pipeline capacity to at least 72,5 million tons per year.[8]

Technical features

The diameter of the 1,510 kilometres (940 mi) long oil pipeline varies between 1,016 millimetres (40.0 in) and 1,067 millimetres (42.0 in). 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 metres (3,500,000 cu ft) each. Pipeline throughflow started at 350,000 barrels per day (56,000 m3/d) and has since increased to 700,000 barrels per day (110,000 m3/d).[2][9]

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 (210,000 m3/d). The second stage has been estimated to cost around US$2 billion and will be completed by 2012.[2][9][10]

Operations

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.[11]

In March 2020, 61 tankers were processed at the Sea Terminal, which is 15 more than in the previous month

Of the 6,450,676 tons of oil shipped in March 2020, 2,831,492 tons were from Tengiz field, 973,899 tons from Karachaganak field, 1,846,332 tons from Kashagan field and 136,532 tons from other Kazakhstan producers

In total, Kazakhstan shippers shipped 5,788,255 tons of oil in March, and another 662,421 tons of oil shipped came from Russia.

From 2001 to April 31, 2020 through the Tengiz-Novorossiysk pipeline system 662,784,671 tons of net oil were delivered to world markets. Of this amount, 582 814 809 tons is oil from Kazakhstan and 85 295 642 tons is oil produced in Russia. The total number of tankers processed during this period amounted to 287. units[12]

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:

  • Russian Federation - 24%
  • JSC National Company KazMunaiGaz - 19%
  • Chevron Caspian Pipeline Consortium Co. - 15%
  • LukArco B.V. - 12.5%
  • Mobil Caspian Pipeline Co. - 7.5%
  • Rosneft - Shell Caspian Ventures Ltd. - 7.5%
  • CPC Company - 7%
  • BG Overseas Holdings Ltd. - 2%
  • Eni International (N.A.) N.V. S.ar.l - 2%
  • Kazakhstan Pipeline Ventures LLC - 1.75%
  • Oryx Caspian Pipeline LLC - 1.75%

References
  1. Adrian Dellecker (June 2008). "Caspian Pipeline Consortium, Bellwether of Russia's Investment Climate? Russie.Nei.visions no.31" (PDF). IFRI. Archived from the original (PDF) on 2008-12-07. Retrieved 2008-07-07. Cite journal requires |journal= (help)
  2. "Caspian Pipeline Consortium — a new global energy supplier" (PDF). Caspian Pipeline Consortium. Archived from the original (PDF) on 2007-08-09. Retrieved 2008-11-22. Cite journal requires |journal= (help)
  3. "Transneft takes CPC bite". Upstream Online. NHST Media Group. 2007-04-29. Retrieved 2008-07-07.
  4. "Russia snaps up Oman CPC stake". Upstream Online. NHST Media Group. 2008-11-06. Retrieved 2008-11-09.
  5. "CPC Shareholders Sign Expansion Deal". Downstream Today. 2008-12-17. Retrieved 2008-12-25.
  6. "First Kashagan Oil is in CPC Pipeline System". CPC.
  7. "The Last CPC Expansion Project Facility Commissioned in Kalmykia". CPC.
  8. "Annual Meeting of CPC Corporate Governance Bodies". CPC.
  9. "CPC Project Basic Features". Caspian Pipeline Consortium. Archived from the original on 2008-12-21. Retrieved 2008-11-22.
  10. "Russia's Transneft Could Take BP to Court over CPC". Downstream Today. 2008-11-19. Retrieved 2008-11-22.
  11. "CPC pipeline exports up in 2009". Silk Road Intelligencer. 2009-04-06. Archived from the original on 2010-08-11. Retrieved 2009-04-06.
  12. "CPC Marine Terminal April shipments". CPC.
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