Kazakhstan President Nursultan Nazarbayev has signed a law ratifying an agreement between the Government of the Republic of Kazakhstan and the Government of the People’s Republic of China on the development and operation of the Kazakhstan-China oil pipeline.

Kazakhstan’s oil and gas company, KazMunay Gas, and China National Petroleum Corporation (CNPC) jointly own the 2228 km oil pipeline. The Majilis Committee on Foreign Affairs, Defense and Security said in a report “The parties agreed that the authorized organizations will consider a possibility of combining the assets of Munai Tas North-West Pipeline Company and Kazakhstan-China pipeline LLP.”

Unified oil tariff

The agreement sets a unified tariff for the transportation of Kazach oil through the Kazakhstan-China pipeline, regardless of the distance from an entry point. The rate for domestic supply within Kazakhstan is approved by the authorized agencies, but it should not be above the export transportation rate.

In the event of the oil shortage on Kazakhstan's domestic market, the Kazakh authorized agency may amend a monthly export schedule, with the notification of the Chinese side.

Kazakhstan-China pipeline capacity

The first stage of the Kazakhstan-China oil pipeline – Atasu-Alashankou ¬– was built in 2003. The second stage – Kenkiyak-Kumkol oil pipeline – was commissioned in August 2007 and completed in July 2009.

The pipeline’s capacity is currently 14 million tpa, and is expected to reach its nominal capacity of 20 million tpa 2014.

For this purpose KazTransOil's facilities are to be upgraded or new facilities built (construction of main oil pumping station GNPS 663, upgrade of main oil pumping station GNPS Kenkiyak, construction of oil pipeline Kumkol-Karakoin, replacement of pipes of pipeline Karakoin-Atasu, construction of oil pumping station NPS Kyzylzhar, Kenkiyak-Atyrau oil pipeline and three oil pumping stations at Kenkiyak-Kumkol oil pipeline).

Edited from various sources by Hannah Priestley-Eaton