October 6, 2011 / 10:43 AM / 6 years ago

Caspian oil shipments to fall amid work on pipeline

* CPC 2012 shipments seen lower than 32 mln tonnes in 2011

* Pipeline consortium working on $5.4 bln expansion

* Kazakh, Russian oil to feed expanded network

By Robin Paxton and Maria Gordeyeva

ALMATY, Oct 6 (Reuters) - The Caspian Pipeline Consortium (CPC) expects a slight decline in crude shipments next year as it works on a $5.4 billion expansion to raise capacity along the route linking Kazakh oilfields to the Black Sea, a CPC official said on Thursday.

The consortium, owned by the Russian and Kazakh states and a group of international oil companies, is undertaking a major expansion of the pipeline to raise annual capacity to 67 million tonnes by 2014 and accommodate an expected leap in Caspian region oil output.

CPC General Director Nikolai Platonov said the consortium would pump slightly less crude next year than the 32 million tonnes planned for 2011. It shipped 34.9 million tonnes in 2010.

“We have an expansion project and a series of contiguous projects that require the temporary stoppage of the pipeline,” Platonov told reporters on the sidelines of a conference.

“It (the amount of oil pumped) will be less, but we will do all we can to ensure that it won’t be significantly less,” he said, declining to estimate volumes for 2012.

The CPC network links the Tengiz oilfield in western Kazakhstan, operated by the Chevron-led Tengizchevroil venture, with the Russian Black Sea port of Novorossiisk.

Russian state-owned oil pipeline monopoly Transneft (TRNF_p.MM) owns 31 percent of CPC, while the Kazakh state, Chevron, ExxonMobil , Royal Dutch Shell (RDSa.L) and Russia’s LUKOIL also have stakes.

Platonov said in a presentation to the conference that capacity would rise to 48 million tonnes per year by 2012-2013 before reaching full annual capacity of 67 million tonnes by the end of 2014.

He said the consortium would fund the cost of the expansion on its own, although he did not rule out the possibility of borrowing should the need arise.


    Kazakh oil will make up the bulk of the additional crude to be shipped via the expanded pipeline, he said, referring specifically to the Tengizchevroil project and the potentially huge Kashagan field in the Caspian Sea.

    Tengizchevroil plans to increase annual crude production to 36 million tonnes by 2016 from 25.9 million tonnes, or approximately 567,000 barrels per day, last year.

    The long-awaited first phase of the Kashagan project, run by another international consortium, is scheduled to begin by the end of 2012 or the beginning of 2013.

    Kazakh Oil and Gas Minister Sauat Mynbayev told a separate news conference that initial production from Kashagan should be around 370,000 barrels per day, with the possibiility of increasing to 450,000 barrels.

    Platonov said he expected Russian oil to make up the balance of shipments. LUKOIL’s Korchagin and Filanovsky fields in the Caspian are likely candidates, he said, while state-controlled Rosneft might also be a supplier.

    Russian exporters have reduced shipments via the CPC this year. Shipments fell to zero in September alone.

    Kazakhstan plans to raise annual crude exports to 110 million tonnes by 2020 from the 72 million tonnes forecast for this year. It expects to ship around 52 million tonnes a year via the expanded CPC versus 28 million tonnes expected in 2011. (editing by Jane Baird)

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