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China, Kazakhstan complete first stage of new gas pipeline

Highlights

China National Petroleum Corp said Monday the first stage of a new natural gas pipeline in Kazakhstan has been completed.

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A ceremony was held on Saturday to mark the completion of the Bozoy-Shymkent segment of the line in the Kazakh capital of Astana during Chinese President Xi Jinping's visit to the Central Asian country, CNPC said.

"The pipeline project has successfully completed the first stage and is now preparing to transmit gas," CNPC said.


China and Kazakhstan signed an agreement to develop the gas pipeline in August 2007 and a year later CNPC and state-owned KazMunaiGaz formed a joint venture for the construction and operation of the project.

The new Kazakh pipeline will have capacity of 10 billion cubic meters/year but this can be expanded to 15 Bcm/year, depending on demand and supply conditions, CNPC said.

The first phase stretches 1,143 km from Bozoy in central Kazakhstan near the Aral Sea and ends in Shymkent in the southeast, where it is to link up to the Kazakh section of the Central Asia-China pipeline network. Construction started in July last year.

KazMunaiGaz's acting chairman, Daniyar Berlibayev, had said in early August that Kazakhstan plans to launch the Bozoy-Shymkent segment of the pipeline in October this year.

A second phase will expand the pipeline from Bozoy to Beyneu over 311 km, and is slated to be completed by 2015, CNPC said. The complete pipeline will cut across 14 cities in Kazakhstan and is intended to fulfil gas demand from users in southern Kazakhstan by transporting gas from the western part of the country.

Ultimately, it will also send Kazakh gas to China via the Central Asia-China network.

The project is part of the "C" line, a third pipeline which runs in parallel with the existing twin pipelines of the Central Asia-China pipeline network, which starts in Turkmenistan and cuts across Uzbekistan and Kazakhstan before reaching China's western Xinjiang province.

The "C" line will have capacity of 25 Bcm/year and is expected to be ready by the end of this year, CNPC said. The "A" and "B" lines have total capacity of 30 Bcm/year and are already in operation.

CNPC said there are currently 10 oil and gas joint cooperation projects under way with Kazakhstan. China's total oil and gas investment in Kazakhstan last year exceeded $10 billion, it added.

--Song Yen Ling, yenling.song@platts.com

--Edited by Deepa Vijiyasingam, deepa.vijiyasingam@platts.com