CHINA COMES TO CASPIAN COAST OF KAZAKHSTAN

Author: Viktoria Panfilova

CHINA COMES TO CASPIAN COAST OF KAZAKHSTAN. (By Viktoria Panfilova. Nezavisimaya gazeta, Sept. 9, 2013, p. 7. Condensed text:) . . . Chinese leader Xi Jinping's state visit to Astana ended today with the signing of a joint declaration on the further development of the comprehensive strategic partnership between Kazakhstan and China. However, the main outcome was expanded cooperation in the energy sector. On Saturday [Sept. 7], the China National Petroleum Corporation (CNPC) and [Kazakh state company] KazMunaiGaz (KMG) signed an agreement to sell an 8.3% stake [in the Kashagan oil and gas development project] to CNPC. Kashagan is a major oil and gas field in Kazakhstan, located in the northern part of the Caspian Sea. Its reserves are estimated at 4.8 billion [metric] tons of oil, and 1 trillion cubic meters of gas. According to KMG board chairman Sauat Mynbayev, the start of oil production at Kashagan is scheduled for Sept. 9; the beginning of commercial production is slated to be announced within a month. Regarding oil transport routes from Kashagan, the KMG head stated: "Some of it will go through the Atyrau-Samara oil pipeline, but most of the oil volume - at least, Kazakhstan's share - will be exported via the Caspian Pipeline Consortium."

At the same time, CNPC and KMG signed a strategic partnership plan. Sauat Mynbayev told reporters: "The price of the transaction is about $5 billion, but in addition there are a number of conditions. For example, the Chinese side will provide half of the capital that KazMunaiGaz would be obligated to invest according to its equity [as a 16% shareholder in the Kashagan project - Trans.]." According to him, CNPC will assist in building a pipe plant, a petroleum industrial complex in Aktau, and some public projects in Astana.

"The sale of 8.3% of the Kashagan field to China, coupled with the launch of the Beineu-Bozoi gas pipeline, means that Western ...

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