Kazakhstan-China oil Pipeline

Currently, the eastern export direction is developing most rapidly. “NC “KMG” JSC together with China National Petroleum Corporation is working on construction of Kazakhstan-China oil pipeline, which implementation is allowed to connect two separate pipeline systems of Kazakhstan and to ensure adequate deliveries of hydrocarbons to promising market of China. The first project for construction of Kazakhstan-China oil pipeline is aimed at diversifying oil transportation directions within the framework of pursuing the policy of creation of a multi-vector system for transportation of hydrocarbons of independent Kazakhstan.

Construction of Kazakhstan-China pipeline is provided in two stages. The first step was implementation of the project Atasu-Alashankou, construction of which was conducted in accordance with the Framework Agreement between the Government of the Republic of Kazakhstan and the Government of the People's Republic of China on development of comprehensive cooperation in oil and gas fields (Beijing, May 17, 2004).

In order to build a pipeline, JSC “KazTransOil” and the China National Corporation for exploration and development of oil and gas (a CNPC subsidiary) have created “Kazakhstan-China Pipeline” LLP (“CCP” LLP) on a parity basis.

The length of the route of Atasu-Alashankou pipeline is 962 km. The pipeline diameter is 813 mm. The capacity of the first phase is 10 million tons per year with further expansion up to 20 million tons per year. The route of the pipeline passes through three regions: Karaganda, East Kazakhstan and Almaty to the final destination Alashankou in China. The project is financed by debt financing guaranteed by the Chinese side. First phase commissioning was executed in July 2006 with full completion of construction in 2008.

In 2010 Atasu-Alashankou 10.1 million tons of oil were transported, 5.8 million tons of oil - for the first half of 2011 using antifriction additives with the planned 5.5 million tons of oil.

Implementation of Kenkiyak-Kumkol pipeline construction project, with capacity of 10 million tons per year, is the first stage of the second phase of construction of Kazakhstan-China oil pipeline and conducted in accordance with the “Agreement on basic principles of construction of the second stage of the Kazakhstan-China oil pipeline between China National Petroleum Corporation and joint-stock company “National Company “KazMunayGas” (Agreement) as of December 20, 2006, on parity basis with China by the “CCP” LLP.

Kenkiyak-Kumkol oil pipeline is 794 km long, 813 mm in diameter, passes through the territories of Aktobe, Kyzylorda and Karaganda regions, Kazakhstan. The capacity of the first stage of the pipeline is 10 million tons per year, with further expansion up to 20 million tons per year. The project was financed through debt financing guaranteed by the Chinese side. First phase commissioning was executed in October, 2009, and Kenkiyak-Kumkol pipeline first stage construction project was fully implemented in December, 2010.

As a part of the second stage implementing full design capacity - 20 million tons/year at Alashankou, is expected to be achieved.

Under the agreements reached in 2010 construction of an oil pump station 11 Atasu – Alashankou is started. Construction is planned to be completed in September, 2011. Commissioning the oil pumping station 11 will increase the capacity of the pipeline up to 12 million tons/year.

30.8 million tons were transported since Atasu-Alashankou commissioning.