Putin tells Kazakhstan's partners to help repair CPC pipeline after attack

Foreign investors in the 1.5 million b/d CPC crude export route from Kazakhstan must take responsibility for supplying equipment for the repair of a pumping station damaged in a Feb. 17 drone attack, President Vladimir Putin said Feb. 18, as Russian officials warned supplies via the route could drop 30%-40%.

Russian officials on Feb. 18 lambasted Ukraine as the alleged author of the attack, in which seven drones reportedly struck the facility at Kropotkinskaya in Russia's Kuban region near the Black Sea.

The CPC pipeline carries around 80% of Kazakhstan's oil production to the Russian port of Novorossiisk for delivery to world markets. Supplies were boosted by the January 2025 startup of a Chevron-led expansion at the highest-producing Kazakh field, Tengiz, which Chevron estimated to have cost $49 billion.

Kazakh officials have been more circumspect on the expected impact, with the pipeline continuing to operate despite the loss of the pumping station.

Putin, however, noted that a gas turbine supplied by Germany's Siemens was among the objects damaged and highlighted sanctions that limit technology supplies to Russia.

"If they themselves are interested in restoring operations at this facility, let them, despite all the sanctions, organize the delivery of the necessary equipment. They should do it themselves," he said in comments broadcast by state media.

Meeting with Putin, Deputy Prime Minister Alexander Novak estimated flows through the pipeline would be reduced by 30%-40% and repairs would take several months, saying that restoring the pumping station would be a "major task... considering the use there of equipment also from Western countries." He went on to allege a link between the attack and the discussions underway between the US and Russia on ending the war in Ukraine, suggesting it was a riposte by Ukraine to US peace efforts.

Earlier, Russian pipeline company Transneft, a major shareholder in the route, said flows were likely to drop by 30% and the repairs to take one-and-a-half to two months. Damage was also sustained to electrical systems, fire prevention systems, a water tank, and the roof of the facility, Transneft said. The Caspian Pipeline Consortium said the pipeline was operating at a reduced rate, bypassing the pumping station.

Conflicting assessments

However, Kazakhstan somewhat played down the impact so far on volumes supplied into the pipeline from its oil fields. "Currently, there have been no restrictions on Kazakh crude by the Caspian Pipeline Consortium -- reception of crude continues according to schedule," Kazakhstan's energy ministry said in a statement, adding deliveries had been switched to bypass the pumping station in the early hours of Feb. 17.

The Caspian Pipeline Consortium said loadings of the grade at Novorossiisk continued "as normal," without specifying any future reduction in loading levels.

A spokesperson for the Tengiz operator, Tengizchevroil, told Platts: "CPC is a key export route for crude oil production from Kazakhstan to reach international markets and many countries rely on this critical transportation system for their energy security. Tengizchevroil's production and export of crude oil via the CPC pipeline remain uninterrupted. We continue monitoring the situation."

The Tengiz expansion and subsequent attractive prices for CPC Blend are said to have stimulated buying interest from East Asia, reopening the arbitrage window for the grade out of the Mediterranean.

Platts assessed CPC Blend at a $3.60/b discount to Dated Brent on Feb. 17, a 15-cent narrowing of the discount.