Kazakhstan's CPC Blend crude supplies unimpeded by pipeline attack: minister

Kazakhstan has suffered no reduction in loadings of its CPC Blend crude at the Russian port of Novorossiisk as the CPC pipeline route continues taking crude despite an attack on a pumping station earlier in the month, energy minister Almassadam Satkaliyev was quoted as saying Feb. 26.

The comments diminish expectations of a reduction in pipeline throughput of some 30%, forecast by the Caspian Pipeline Consortium after the drone attack on a pumping station at Kropotkinskaya in southern Russia on Feb. 17. Russia blamed Ukraine for the drone attack, while an Internet post by Ukraine's military appeared to acknowledge responsibility for attacking facilities at Kropotkinskaya. Russia has said Kazakhstan's international partners should help in the repairs, particularly overcoming sanctions hurdles to getting equipment.

However, data from S&P Global Commodities at Sea suggested continued high rates of loading at the CPC maritime terminal outside Novorossiisk, with loadings of around 1.66 million b/d in the last week, potentially reflecting the recent ramp-up of an expansion at Kazakhstan's highest-producing oil field, Tengiz. Tengiz is due to reach nearly 1 million b/d of crude production by the second quarter 2025. The Kropotkinskaya facility was one of around 15 along the 1,500 km pipeline route.

"Currently, repairs to the [pumping station] facility are being carried out at the expense of the [pipeline consortium]. For the time being there's no risk of a reduction in volumes of flows onto tankers," Satkaliyev said, quoted by the Orda.kz news site, and by media in Russia.

Technical solution

"A technical solution has been implemented" involving a bypass of the damaged station, Satkaliyev said. "Currently the risks are minimal."

In a statement, the Chevron-led operator of Tengiz reiterated its "production and export of crude oil via the CPC pipeline remain interrupted."

The operator of Kazakhstan's second-highest producing field, Kashagan, said Feb. 24 it continued "following its production plans, endorsed by the [Kazakh] government and shareholders."

The relatively upbeat comments contrast with a Feb. 17 warning by Russia's Transneft, a major shareholder in the CPC route, that volumes along the route could drop 30% pending repairs to the pumping station, which could last one-and-a-half to two months.

However, a source familiar with the facilities highlighted the potential for confusion when estimating reductions. The source noted that Russian expectations of normal throughput were in fact 90% of real capacity, and that the potential use of drag-reducing chemicals could further boost output.

CPC Blend prices have weakened in recent weeks, with little increase since the drone attack. The grade was assessed by Platts at a $3.30/b discount to Dated Brent on Feb. 25.