INTERVIEW-Kazakhstan builds new oil pipelines, offer to Russia transit

/REUTERS, Astana, Aleksey Kalmykov, September 10, 03/ - Kazakhstan, which has not outlet to the sea and which more and more depend on oil transit through Russia, wants to become the transit state for Russian oil due to building of the oil pipeline to China and oil deliveries to Iran, said general director of the state-owned company Kaztransoil Askar Smankulov to Reuters. Kazakhstan is actively increasing oil extraction and within ten years wants to become one of the largest producers, extracting 100 m. tons by the year 2010, and by 2015 - 150 m. tons of oil a year. As extraction grows oil pumping through Kaztransoil's pipeline system and the company's revenues grow too, however as regards export it suffers strong competition from outside of Caspian pipeline consortium (CPC), which built the first big private oil pipeline on the territory of the former USSR from Kazakh field Tengiz to Russian port at the Black sea. As extraction will grow, in Smankulov's opinion, Kazakhstan will have not only expand all existing directions of export, but also build new pipelines. Kaztransoil is ready to do it by itself and hopes that new capacities will be used also for transit of Russian producers' oil, which abruptly increase extraction and complain about lack of export routs. "Kazakhstan needs that by the year 2010 CPC works in full volume, and not only CPC, but also we with Atyrau-Samara, and new directions should work in full volume", - said Smankulov in the interview to Reuters. By that time CPC is to reach the capacity 67 m. tons a year, and the only export oil pipeline of Kaztransoil Atyrau-Samara, capacities of which are now equal to 16.0-16.5 m. tons, and the load - about 15 m. tons a year, will be extended up to 30 m. tons, Smankulov hopes. The other oil is to be sent to China through the new oil pipeline and through two oil terminals at Caspian Sea to Iran, Azerbaijan and Russia' port in Makhachkala. "China is the first big plan of our government, this directions is to work ", - said Smankulov. The first site of the pipeline Kenkiyak-Atyrau has been set in exploitation already - now Chinese CNPC, which work in Aktyubinskaya oblast in the north-west of Kazakhstan, pumps raw stuff to the west, to CPC. Building of two sites - Kenkiyak-Aralsk-Kumkol and Atasu-Alashankou - will let join the west with the east of Kazakhstan and start oil pumping to China. First Kazakhstan side talked about joint building with Chinese side and offered to Russian companies to participate in the project, due to finishing of which they will have outlet to Chinese market through the oil pipeline Omsk- Pavlodar-Atasu. Now Kaztransoil says it's ready to build the oil pipeline by itself, if only there are guaranteed volumes of pumping. "Financing is not a problem. If there are guaranteed volumes on any direction Kaztransoil can build any oil pipeline by itself", - said Smankulov. According to his words, starting of the Chinese direction will cost more than $1 bn. In the future the capacity of the Chinese pipeline may reach up to 50 m. tons of oil a year, 30 m. of which Kazakhstan can offer to Russia. "Now the planned carrying capacity of Atasu-Alashankou is up to 50 m. tons. Our task is to bring here the volume (of extracted in Kazakhstan oil) equaling to 20 m. tons. It's real to do it within three years. The system will start working in full volume by the year 2006 ", - said Smankulov. Besides, Russia itself studies variants of building of the oil pipeline to China and to the countries of Asia-Pacific region - from Angarsk to Datsin and Nakhodka. However the process of projects co-ordination is interrupted at present. OTHER ROUTES Beside eastern-china direction, Kaztransoil wants to develop its deliveries to the south and to the north through Russia. The head of Kaztransoil said he expects the pumping through underloaded Atyrau - Samara will increase. Among the reasons that currently restrain the growth of oil supply in this direction, he mentioned the absence of joint with Transneft Russian monopoly the bank of oil quality, competing power of private CPC that has such a mechanism, and the shortage of oil as a result of increase of the Kazakhstan petroleum refinery production capacity for the sowing period. The export of Kazakhstan oil through Atyrau - Samara in 2003, according to Smankulov, will approximately remain at previous year level - for about 15m tons. Meanwhile, CPC that pumped 11m tons in 2002, for the period of eight month pumped more than 9.0m tones and now more than 1.1m of tones goes to export every month through this channel. Smankulov denies the presence of any misunderstandings with Russian colleagues from Transneft and believes that staged, agreed at interstate level expansion of Atyrau - Samara up to 30m tones a year is matter of time. "We will try to speed up this process. This is not an inexpensive pleasure - $180 m in general", -Smankulov said, specifying that each party finances its own part. The total length of Atyrau - Samara amounts to 697 kilometers, 535 of which is Kazakhstan's and 162 is Russian. In the meantime Kazakhstan seeks new routes, getting more accustomed to southern direction. "Citing our managers, I can say that the southern direction is the most economically advantageous one." "Much of politics rather than economy yet depresses", he added. The pipeline to Iran still remains a dream for a Kazakhstan unrealizable because of U.S. sanctions imposed on Teheran. Kaztransoil, according to Smankulov, is engaged in construction of the projects that was chosen by KazmynaiGas, its parent company. At current it discusses only iran pipeline with French Total that works at Caspian shelf. Export to Iran for the present time is limited to small swap sea shipments. Kaztransoil wants to boom this direction at the expense of Russian oil by exploiting Omsk-Pavlodar-Shymkent-Chardjoy pipeline (Seidian refinery) and scaffold bridge near Shymkent. "It is necessary to explore our transit abilities: towards Seidian refinery at Turkemenistan. We made an offer: to explore in this direction the oil loading rack, 50 km away from Shymkent to deliver oil by rail road either to Turkmeny for refinement and please, to Iran", - Smakulov said, at the same time admitting that "Uzbek partners are not yet ready and there are also problems with Turkmen partners". "However as a first stage we are ready to ship by rail road. Our filling abilities amounts to at least 1.0-1.2 mn tones (a year)", - he added. Besides, up to 10m tones of additional deliveries through Caspian Sea including that for loading Baku-Tbilisi-Djeikhan pipeline in future will be provided by new sea terminal at Kuryk, which is located 60 kilometers away form currently functioning terminal in Aktau. [2003-09-10]