UPI Energy Watch

Kazakhstan to extend oil pipeline to Caspian

Kazakhstan plans to construct a 435-mile-long oil pipeline from the city of Atasu, central Kazakhstan, to the Caspian, which will become a part of the Atasu-Alashankou pipeline to China, Kazakh President Nursultan Nazarbaev said.

"We have laid a pipeline to China. We have to build 700 kilometers more, so that the pipeline reaches the Caspian Sea, and we will do this," Nazarbaev said Friday at the 17th plenary meeting of the council of foreign investors in Ust-Kamenogorsk, the administrative center of the East Kazakhstan province.

Kazakh and Chinese governments are "seriously looking into the possibility of building a railway from Western China to the Caspian Sea," he said.

The investors' council held a meeting to discuss the development of Kazakhstan's transportation potential in integration processes.

The transnational oil pipeline Atasu-Alashankou was officially commissioned following the conclusion by the governmental acceptance committee on July 6. The second half of July saw the beginning of crude oil supply from Kazakhstan to China through this pipeline. In January-March this year 1.1 million tons of oil was pumped through Atasu-Alashankou pipeline.

TOO Kazakhstan-China Pipeline owns the pipeline. KazTransOil and China National Oil and Gas Exploration and Development Corp. have equal stakes in the pipeline.

LUKoil suggests Gazprom-led consortium

Lukoil, Russia's largest oil company, suggested that Russian gas giant Gazprom lead a consortium to develop gas fields in East Siberia, Vagit Alekperov, head of LUKoil, said.

"A consortium needs to be set up so that Gazprom can be the operator of the project to develop fields in East Siberia and the Far East," Alekperov said at a meeting of the government's commission on fuel and energy.

Alekperov said this ought to kick-start the Eastern Gas Program.

The consortium idea is not new. Gazprom, Rosneft and Surgutneftegas secured an agreement in 2003 to form a consortium to operate in East Siberia and Yakutia. TNK-BP later expressed an interest in joining the consortium, suggesting that Gazprom form a joint venture to develop the Kovykta and Chayanda fields.

LUKoil lays claim to Turkmen oil fields

The Turkmen government has approved rights for LUKoil to work three fields in the Caspian, Turkmen media reports said.

The reports came amid intensified international competition over access to Turkmenistan's vast oil and gas resources following the December death of Turkmenistan's long-ruling president, Saparmurat Niyazov, who had limited foreign access to the ex-Soviet republic's energy sector.

New Turkmen President Gurbanguli Berdymukhamedov and Lukoil CEO Vagit Alekperov secured an agreement Tuesday, the state newspaper Neutral Turkmenistan said.

Lukoil, Russia's largest private oil company, plans to begin to develop the Caspian's oil and gas fields in the Turkmen section of the Caspian Sea shelf "in the near future," the paper said. It did not name the fields or specify whether they were believed to contain oil, natural gas or both.

Last month, Russia secured a deal with Turkmenistan and neighboring Kazakhstan to build a pipeline that would carry Turkmen natural gas to Russia and on to Europe -- a blow to Western efforts to import Central Asian energy along new routes bypassing Russia.

Gazprom controls the only existing transit route for Turkmen gas exports to other ex-Soviet republics and Europe. Berdymukhamedov has said the country is interested in developing other routes to Europe and Asia.

Only two major foreign companies now extract oil in the Turkmen sector of the Caspian shelf: Malaysia's national oil company, Petroliam Nasional Bhd., or Petronas, and the United Arab Emirates' Dragon Oil PLC.

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Closing oil prices, June 15, 3 p.m. London

Brent crude oil: $70.67

West Texas Intermediate crude oil: $67.43

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