KazTransOil, a subsidiary of Kazakhstan's national company KazMunaiGas, began transporting Russian oil to China along the Omsk-Pavlodar-Atasu-Alashankou route, according to Interfax.

Kazakh pipelines are expected to transport 101,100 tons of Russian crude this January, including 51,100 tons from TNK-BP and 50,000 tons from Gazprom Neft (OTCBB:GZPFY). The total transit will amount to 300,000 tons in the first quarter of this year.

"KazTransOil will transport the rest of the planned amount in February-March 2008. The transit will be distributed equally each month," the company said.

The annual exports of up to 5 million tons of Russian crude to China via Kazakhstan result from the mutual transit agreement Russia and Kazakhstan signed in late November. No transit schedules were made earlier.

Meanwhile, an informed source told Interfax late last week that KazTransOil would not allow Gazprom Neft to transport crude through Kazakhstan. A representative of Gazprom Neft confirmed the information and said that his company was ready to start the supplies on Dec. 26, 2007.

"Gazprom Neft will apply for transportation of 360,000 tons of crude in the second quarter of this year," he said.

KazTransOil operates trunk pipelines with a total length of 5,215 kilometers and water mains with a length of 2,175 kilometers. The total size of the company's storage reservoirs is 1.3 million cubic meters, including 1.15 million of crude storage reservoirs.

Russian Gas Society against gas increases

Raising the mining tax on gas will kill the industry, said Valery Yazev, State Duma deputy speaker and Russian Gas Society president.

He was quoted as saying in Itar-Tass that this issue has become important because of the adoption of a program for raising gas prices on the domestic market by 2011 to the level matching export gas prices.

The domestic price "will be about $125-140 U.S. per 1,000 cubic meters," Yazev said. "Naturally the Finance Ministry that has to ensure budget revenues suggested raising the mining tax for gas five to six times since gas pricing are growing."

He added: "In my view, this is a pernicious decision. Although the price of gas in 2011 will increase 2.5-2.6 times from its current level, it will be illogical to increase the mining tax five or six times."

He noted that "gas production is moving to remote regions with complex geological conditions" and "the mining tax must not be raised proportionately to inflation."

Yazev said: "Introducing tax holidays for the organizations that move to remote regions in Siberia, offshore areas, and the Far East, just as it has been done for the oil industry."

U.S. firm suspends work in Tajikistan

American firm AES suspended work in Tajikistan, Hamrokhon Zarifi, the country's foreign minister, told reporters.

He said the reason AES left is unknown, Avesta reported.

AES' head was invited to Dushanbe to meet with the Tajik Foreign Ministry's leadership this week but is not expected to show.

Zarifi said an agreement had been concluded with AES back in 2006 to build a thermal power station at a coalfield in Tajikistan and construct a 220-kV high-voltage power line from Tajikistan to Afghanistan.

The Foreign Ministry also said the government invited AES to Tajikistan's market two years ago.

Zarifi said when Dilshod Ismatulloyev, the manager of the company in Tajikistan, was interviewed with Avesta, he said that he had received an instruction from the company's leadership to suspend the branch's activities in Tajikistan.

"The Tajik side has fulfilled almost all of its commitments stipulated by the agreement, reached between the (Tajik) government and AES. But I do not know why the company's leadership decided to suspend its activities," Ismatulloyev noted.

--

Closing oil prices, Jan. 22, 3 p.m. London

Brent crude oil: $89.96

West Texas Intermediate crude oil: $88.21

--

(e-mail: energy@upi.com)