CPC will not delay expansion at Kashagan: expert

The Caspian Pipeline Consortium (CPC) is unlikely to delay expansion of production capacities at Kashagan, the giant oil and gas field in the Kazakhstan sector of the Caspian Sea, considering the existing agreements between the CPC and Kashagan’s operators, Tengrinews reports citing a leading expert of Finam Management Dmitry Baranov. The Consortium plans to start dispatching oil from Kashagan in the end of October. The plan is to supply 93.5 thousand tons of Kashagan oil to ExxonMobil and Shell via the CPC's Black Sea terminal in October. According to the traders, this will be the first Kashagan oil supplied via the CPC network. “The expansion of CPC’s capacity is scheduled for Q3, so it is most likely that the works in the Consortium’s facilities have already started. Delays would mean lawsuits and penalties for the CPC and would harm the reputation of the CPC and its shareholders,” Baranov said. According to the speaker, the commercial oil production at Kashagan is mostly likely ti start on the schedule, which is within the nearest month. “The existing capacities of the CPC, as well as other possible ways of transportation will be used to dispatch oil to the consumers. Meanwhile, the works on expansion of the CPC capacities will continue. But, of course, only as much oil will be produced and transported as they are capacities available in the region. That means that nobody will produce more oil than it is possible to transport via the existing infrastructure,” the analyst said. Senior analyst of the Agency for Analysis of Investment Profitability Murat Abulgazin says that the CPC is currently behind the schedule of expansion of the capacities for oil supplies from West Kazakhstan oilfields. “The CPC expansion was planned during construction of the pipeline with the possible increase of production at Tengiz and Karachaganak in mind. And this is exactly what has been happening over the past years. That is why the preparation process started in 2010 and in 2011 the works to expand the pipeline from the current 33 million tons to 67 million tons started with the commercial production at Kashagan in mind,” the analyst said. According to the expert, implementation of the project was delayed because the pipeline's foreign shareholders had issues with the technical documentation, new equipment and the launch of the technological operations. "In summer 2012 the delay made around one year, but in December the same year it was reduced to 6 months. However, the project’s completion was still postponed from 2014 to 2015,” Abulgazin said. According to him, the natural decrease of supplies registered in the last two years resulted from the beginning of the actual expansion works in the system. By Azhar Ashirova