Kazakhstan commits $130M to gas pipeline

Sept. 16, 2011 at 6:25 AM
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ASTANA, Kazakhstan, Sept. 16 (UPI) -- Kazakhstan this week celebrated the start of construction on a regional natural gas pipeline connected to China with a $130 million government investment.

Kazakh Finance Minister Bolat Zhamishev said in Astana that the government has committed that amount to help fund the Beyneu-Bozoi Shymkent pipeline, a week after its first weld was commemorated with a high-profile ceremony, the Trend News Agency reported.

The planned 920-mile pipeline will run from Beyneu in Kazakhstan's western oil and natural gas fields, to Shymkent, Kazakhstan, where it will hook up with the Central Asia-China gas pipelines, which begin in Turkmenistan and passes through Kazakhstan to Shymkent.

"Within a forced industrial-innovative development, ($130 million) will be allocated from the state budget for the construction of Beyneu-Bozoi Shymkent gas pipeline," the agency quoted Zhamishev as saying during a budget address.

Kazakhstan says the pipeline will for the first time provide stable gas supplies to its southern regions of Kizilorda, South Kazakhstan, Jambil and Almata when its first stage is completed in March 2013.

The second stage of the line -- a joint venture between the national KazTransGas company and the state-owned China National Petroleum Corp. -- will be finished by 2016 with a capacity of 10 billion-15 billion cubic meters of natural gas per year, officials say.

"Our problem of dependence of southern regions on imported gas will be resolved," Kazakh First Vice Prime Minister Umirzak Shukeyev said during ceremonies Sept. 6 in Turkestan.

Kazakh President Nursultan Nazarbayev also weighed in with a letter in which he "congratulated the people of the country on this significant achievement -- the establishment of the country as an independent gas power."

The new pipeline's significance in strengthening energy ties between Kazakhstan and China was also evident by the presence of Liu Tienan, head of China's National Energy Administration.

It will feed natural gas supplies into the 4,000-mile Central Asia-China gas pipelines from Turkmenistan. Last week, Chinese officials signed an accord to build an 800-mile Kazakh section of a new, third Central Asia-China pipeline -- known as "pipeline C" -- with a capacity of 25 billion cubic meters per year.

The Chinese company has said the three Central Asia pipelines together are expected to transport 55 billion-60 billion cubic meters of natural gas per year to China by 2015, doubling the current capacity.

It announced this week it will issue $3.13 billion in 10-year bonds, with some $2.4 billion of the amount earmarked to build pipeline "C," the oil and gas industry journal OilPrice.com reported.

At the Turkestan ceremony, Liu said China and Kazakhstan should accelerate their energy cooperation on both pipeline projects "to ensure long-term and stable supplies of oil and gas" to the world's second largest economy, the Chinese news agency Xinhua reported.

Liu said China and Kazakhstan will "continue to push forward cooperation in new energy and resource equipment manufacturing as well as explore new areas of cooperation."

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