Caspian Pipeline Consortium

Russia-Kazakhstan Oil Pipeline

Caspian Pipeline Consortium
Location of Caspian Pipeline Consortium
Location
Country	Kazakhstan, Russia
General direction	east–west
From	Tengiz field, Kazakhstan
To	Novorossiysk, Russia
General information
Type	oil
Partners	Transneft, Government of Kazakhstan, Chevron Caspian Pipeline Consortium Co., LukArco, Mobil Caspian Pipeline Co., Rosneft - Shell Caspian Ventures Ltd., Agip International (N.A.) N.V., Oryx Caspian Pipeline LLC, BG Overseas Holdings Ltd., Kazakhstan Pipeline Ventures LLC (KazMunayGas and BP)
Operator	CPC-R, CPC-K
Commissioned	2001
Technical information
Length	1,510 km (940 mi)
Maximum discharge	1,400,000 barrels per day (220,000 m/d)

The Caspian Pipeline Consortium (CPC) is a consortium and an oil pipeline that transports Caspian oil from the Tengiz oil field in Kazakhstan to the Novorossiysk-2 Marine Terminal, an export terminal at the Russian Black Sea port of Novorossiysk. It is one of the world's largest pipelines and a major export route for oil from the Kashagan and Karachaganak fields. The CPC pipeline transfers about 1% of global oil supply and handles almost all of Kazakhstan's oil exports. In 2021, the pipeline exported up to 1.3 million barrels per day (bpd) of Kazakhstan's main crude grade, light sour CPC Blend, which represented 80% of Kazakhstan's total oil production of 1.6 million bpd.

The pipeline's largest shareholders include Chevron and Exxon. As of 2009, the CPC pipeline was the only oil export pipeline in Russian territory not wholly owned by Transneft.

History

CPC was initially created in 1992 as a development by the Russian, Kazakhstani and Omani governments to build a dedicated pipeline from Kazakhstan to export routes in the Black Sea. Chevron Corporation was asked to join, however talks broke down due to the high financial burden Chevron would have to take on relative to equity in the pipeline. Progress on the project stalled for several years until 1996 when a restructure included eight production companies in the project. Among the companies were Chevron, Mobil, LUKoil, Royal Dutch Shell and Rosneft. BP joined the consortium in 2003. Shares were divided fifty-fifty between the three states and the eight companies. Production companies financed the construction cost of US$2.67 billion, while the Russian Federation contributed unused pipeline assets worth US$293 million.

In April 2007, the Russian government transferred its shares to the Russian state-owned oil pipeline company Transneft. In October 2008, the Government of Oman sold its 7%-stake to Transneft at a price of $700 million and withdrew from the project. On 17 December 2008, a memorandum on expanding the pipeline was signed.

On October 14, 2016, crude oil from Kashagan oil field in Kazakhstan first started flowing into the Caspian Pipeline Consortium's system.

On April 18, 2018, the last pump station of CPC Expansion Project - PS-2 in Kalmykia - was put into permanent operation.

On May 21, 2019, the annual meeting of CPC shareholders adopted the Bottleneck Elimination Program (BEP), which provides for expansion of the Tengiz - Novorossiysk oil pipeline capacity to at least 72.5 million tons per year.

Technical features

The diameter of the 1,510 kilometres (940 mi) long oil pipeline varies between 1,016 millimetres (40.0 in) and 1,067 millimetres (42.0 in). There are five pumping stations. The marine terminal includes two single point moorings and the tank farm consists of four steel storage tanks of 100,000 cubic metres (3,500,000 cu ft) each. Pipeline throughflow started at 350,000 barrels per day (56,000 m/d) and has since increased to 700,000 barrels per day (110,000 m/d).

The second stage reached a capacity of 1.4 million barrels per day (220,000 m/d). As of 2022, the pipeline throughput was about 1.2 million barrels per day (190,000 m/d), about 1.2% of global oil demand.

Operations

In 2008, CPC transported 31.5 million tons of crude, down from 32.6 million tonnes in 2007. In the first three months of 2009, the pipeline transported 8.7 million tonnes of oil.

From 2001 to April 31, 2020, through the Tengiz-Novorossiysk pipeline system 662,784,671 tons of net oil were delivered to world markets. Of this amount, 582 814 809 tons is oil from Kazakhstan and 85 295 642 tons is oil produced in Russia. The total number of tankers processed during this period was 287.

In March 2022, two of the three pipeline connected ship berths at the Port of Novorossiysk suffered storm damage. Repairs may take two months, with exports falling by up to 1 million barrels per day.

On 6 July 2022, a Russian court ordered the suspension of the pipeline for 30 days over oil spills. The CPC appealed the ruling and the suspension was lifted on 11 July of the following week, and the CPC was instead fined 200,000 rubles (US$3,300). Despite the July 6 ruling, the operator of Kazakhstan's Tengiz oil field, Tengizchevroil, said that the transfer of oil through the CPC had not been interrupted since immediate suspension of the pipeline was technically impossible and would have resulted in "irreversible consequences".

The CPC pipeline handles almost all of Kazakhstan's oil exports, which makes the country oil supply routes heavily dependent on Russia. In addition, about 15% of the rest of Kazakhstan's oil exports are also transferred through Russia (while about 5% is sent to China or to various other destinations over rail and the Caspian Sea). After the 6 July suspension of the pipeline, Kazakhstan's President Kassym-Jomart Tokayev ordered the government of his country's to diversify its oil supply routes.

Consortium

The Caspian Pipeline Consortium was initially registered in the Bermuda Islands in 1992. It is split into two companies: CPC-R operates the Russian section of the pipeline and CPC-K operates the Kazakh section.

The shareholders of the consortium are:

Transneft - 24%
KazMunaiGaz - 19%
Chevron Caspian Pipeline Consortium Co. - 15%
LukArco B.V. - 12.5%
Mobil Caspian Pipeline Co. - 7.5%
Rosneft - Shell Caspian Ventures Ltd. - 7.5%
CPC Company - 7%
BG Overseas Holdings Ltd. - 2%
Eni International (N.A.) N.V. S.ar.l - 2%
Kazakhstan Pipeline Ventures LLC - 1.75%
Oryx Caspian Pipeline LLC - 1.75%

References

^ "Russian court lifts suspension for Caspian pipeline operations". Reuters. 11 July 2022. Retrieved 11 July 2022.
^ Valle, Sabrina; Bousso, Ron (11 July 2022). "Analysis: Oil majors face output slump, deep losses if Russia stops Kazakh pipeline". Reuters. Retrieved 11 July 2022.
^ Dellecker, Adrian (June 2008). "Caspian Pipeline Consortium, Bellwether of Russia's Investment Climate? Russie.Nei.visions no.31" (PDF). IFRI. Archived from the original (PDF) on 2008-12-07. Retrieved 2008-07-07.
^ "Caspian Pipeline Consortium — a new global energy supplier" (PDF). Caspian Pipeline Consortium. Archived from the original (PDF) on 2007-08-09. Retrieved 2008-11-22.
"Transneft takes CPC bite". Upstream Online. NHST Media Group. 2007-04-29. Retrieved 2008-07-07.
"Russia snaps up Oman CPC stake". Upstream Online. NHST Media Group. 2008-11-06. Retrieved 2008-11-09.
"CPC Shareholders Sign Expansion Deal". Downstream Today. 2008-12-17. Retrieved 2008-12-25.
"First Kashagan Oil is in CPC Pipeline System". CPC.
"The Last CPC Expansion Project Facility Commissioned in Kalmykia". CPC. Archived from the original on 2018-04-23.
"Annual Meeting of CPC Corporate Governance Bodies". CPC. Archived from the original on 2019-05-26.
"CPC Project Basic Features". Caspian Pipeline Consortium. Archived from the original on 2008-12-21. Retrieved 2008-11-22.
"Kazakhstan's Tengiz oil field operator says resuming normal output after protests". S&P Global Commodity Insights. 2022-01-09. Retrieved 2022-03-23.
^ "Russia warns of sharp Caspian pipeline oil export drop after storm". Reuters. 22 March 2022. Retrieved 23 March 2022.
"CPC pipeline exports up in 2009". Silk Road Intelligencer. 2009-04-06. Archived from the original on 2010-08-11. Retrieved 2009-04-06.
"CPC Marine Terminal April shipments". CPC. Archived from the original on 2020-05-09.

External links

v t e Pipeline systems of Russia by year of launch
Natural gas pipelines	Saratov–Moscow pipeline (1946) Central Asia–Center (1960–1988) Northern Lights (1975–1994) Urengoy–Pomary–Uzhhorod pipeline (1983) Yamal–Europe pipeline (1997) Blue Stream (2003) Dzuarikau–Tskhinvali pipeline (2009) Baku–Novo Filya pipeline (2010) Bovanenkovo–Ukhta (2011) Nord Stream 1 (2011–2012) Nord Stream 2 (suspended) Sakhalin–Khabarovsk–Vladivostok pipeline (2011–2012) South Stream (cancelled) Power of Siberia (2019) TurkStream (2020) Altai gas pipeline (proposed)
Petroleum (oil) pipelines	Grozny–Tuapse oil pipeline (1928) Tikhoretsk–Tuapse pipeline (1962) Druzhba pipeline (1964) Uzen–Atyrau–Samara pipeline (1971) Baku–Novorossiysk pipeline (1997) Baltic Pipeline System (2001) Caspian Pipeline Consortium (2004) Eastern Siberia–Pacific Ocean oil pipeline (2010) Baltic Pipeline System-II (2012–2013) Murmansk Pipeline (proposed)
Other pipelines	Ammonia: Togliatti–Odessa pipeline (1981)

v t e Black Sea energy
Oil fields	A-T Anastasievsko-Troitskoye B-T C-T Cobza D-T Delta IV Delta VI Eugenia Eugenia South Gîsca Irina Lebăda Est Lebăda Vest Midia SE Mihaela Olimpiysky Pescăruș Prykerchenske Sinoe Subbotin Tuapse Tyulenovo Val Shatsky
Natural gas fields	A–E Akçakoca Ana Anca Arkhangelske Balaur Bezimenne Bianca Chaika Clara Cobălcescu Doina Domino East Cobălcescu Florina Foroska Galata Gina Holitsynske Ioana Izgrev Kaliakra Kaliakra East Kamchia Lira Luceafărul Maria Miorița Muridava Nadia Obzor Odeske Pallas Paula Pelican South Pivdenno-Holitsynske Ropotamo Sakarya Shmidtivske Shtormove Skifska South Cobălcescu
Pipelines	AGRI AMBO Baku–Batumi Baku–Novorossiysk Baku–Supsa Blue Stream BRUA Burgas–Alexandroupoli Caspian Pipeline Consortium Grozny–Tuapse Odesa–Brody PEOP Samsun–Ceyhan Balkan Stream South Stream TurkStream White Stream
Refineries	Lukoil Neftohim Burgas Petromidia
Oil terminals	Kulevi Midia Novorossiysk Tuapse

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