Better future through new routes

 

KazTransOil Open Joint-Stock Company (JSC), the largest pipeline company of the Republic of Kazakhstan, owns a powerful branched network of trunk oil pipelines that transport about 60% of all oil produced in the country.

The Company implements the central supervisory control, manages oil supplies through the Kazakhstan's pipeline grid and takes all required diagnostic, repair and accident-preventive measures.

Through 10 successful years of operation KazTransOil JSC has performed a great work to ensure complex development of the oil pipeline grid and enhance its competitive ability and reliability. Thus, the Company has expanded and upgraded the existing oil pipeline system, constructed new transportation and handling facilities and developed a strategic policy aiming at integration of the systems of its Western and Eastern branches.

Over the above-stated run, the Company has commissioned new pipelines such as Kenkiyak-Atyrau, Alibekmola-Kenkiyak, Severniye Buzachi-Karajanbas, Atasu-Alashankou, Shagyr and Atasu railroad overpasses, expanded the capacity of the Atyrau-Samara oil pipeline and Aktau Port along with other rail collecting and loading terminals.

At the same time, the Company acts as an operator that manages transportation and transit of Kazakh oil across CIS countries and Europe.

KazTransOil's cooperation with pipeline companies of Russia, Ukraine and Belarus in the field of oil transportation & transit is a very important aspect of the economic cooperation that maintains and enhances integration within the CIS countries.

KazTransOil JSC has contacts with such pipeline system operators as Transneft JSC, Ukrtransnafta JSC, state-run unitary Gomeltransneft Company and Druzhba, the entity of Novopolotsk that deals with oil transportation.

Oil transportation through the Republic of Kazakhstan is implemented on the basis of a model contract that concerns rendering of oil transportation services. The contract was approved pursuant to Decree No 1194 of the Kazakhstan's Government dated November 28, 2003.

Hereby, the Company has created a necessary contractual basis to ensure oil transportation and transit.

The scope of oil transportation and turnover are viewed as the core criteria of the KazTransOil's successful business activity. Within 10 years, the volumes of oil transportation in the country grew from 22.9 million tonnes in 1997 to 43.3 million tonnes in 2006. Respectively, the turnover went up from 17.2 billion tonnes/km in 1997 to 28.8 billion tonnes/km in 2006.

 KazTransOil-operated pipeline system transports oil according to delivery schedules approved by the Ministry of Energy & Mineral Resources of the Republic of Kazakhstan on the basis of model contracts with petroleum companies in the following directions:

The Uzen-Atyrau-Samara route is one of the major export pipelines for transportation of Kazakh oil. Petroleum supplied through this pipeline is further transported via the pipeline systems of Transneft JSC and CIS states towards Black Sea and Baltic Sea  terminals and the markets of European countries.

The major increase in volumes of oil transportation through this route was achieved in late 2000 and 2001 due to introduction of anti-turbulent additive at limitative areas. The Company also implemented upgrading of the Uzen-Atyrau-Samara oil pipeline that enabled to enhance the throughout capacity in the Atyrau-Samara section from 12.3 to 15.6 million tonnes a year, while transportation volumes increased from 11.8 million tonnes a year in 2000 to 15.6 million tonnes a year in 2006. At the same time in January 2007 the Atyrau-Samara oil pipeline pumped 1,375 thousand tonnes. This is a record figure since the commissioning of the pipeline.

Compared to the 90s of the previous century when the vast majority of Kazakh oil export was transferred through the Atyrau-Samara oil pipeline, within the recent years petroleum companies have significantly diversified oil delivery routes mainly due to newly constructed pipeline and handing facilities.

The Tengiz-Novorossiysk oil pipeline of the Caspian Pipeline Consortium (CPC) commissioned in 2001 turned to be a significant milestone in the history of the petroleum industry.

As some petroleum companies enjoying the right for the throughput capacities did not have a direct access to this route, KazTransOil JSC has set up oil handling facilities on the Atyrau oil pumping station to ensure access for oil supplied through Uzen-Atyrau, Kenkiyak-Atyrau, Martyshi-Atyrau oil pipelines and railroad to CPC.

In 2006 the system fed 4.4 million tonnes of oil to the CPC pipeline.

Kenkiyak-Atyrau (6 million tonnes per annum) and Alibekmola-Kenkiyak (3.6 million tonnes per annum) oil pipelines were commissioned in 2003 to ensure transportation of growing oil volumes produced in the Aktyubinsk area.

The Kenkiyak-Atyrau oil pipeline's startup enabled to significantly reduce volumes of Aktyubinsk oil transported to the Atyrau oil-pumping station. At the same time shippers got a more reliable and economically expedient alternative to previously used rail transportation. The Kenkiyak-Atyrau oil pipeline project has been implemented by ‘Munaytas' Northwest Pipeline Company JSC where KazTransOil JSC owns 51%, whereas 49% belongs to CNPC International Ltd (China).

In 2000 the Company commissioned Atasu oil-loading railroad overpass due to the high concern of shippers to supply oil to the China's market.

KazTransOil JSC started up Shagyr oil-loading unit to diversify directions of Kumkol oil supplies. The unit's capacity is 3 million tonnes per annum. All the year round the Shagyr railroad overpass fills tank cars with Kumkol oil. Low transportation tariffs along with the principle of non-discrimination access adhered by the Company are one of the main advantages of this route.

Caspian Aktau Port, where KazTransOil JSC reloads oil delivered by pipeline and rail transport to tankers, is a very important export direction for Kazakhstan's petroleum companies.

At the moment the port's oil-loading terminals receive oil through:

Due to the upgrading works the Company carried out on the Aktau railroad overpass in 2001, the loading of tank cars with Kumkol oil with high congelation temperature is implemented all the year round. 

In view of growing demand for Trans-Caspian oil shipments, in 2003-2005 the Company upgraded and expanded the Aktau oil-loading railroad overpass that enabled to raise oil handling from tank cars to further transportation by tankers from 2.9 million tonnes in 2002 up to 4.5 million tonnes in 2006.

Oil export from Aktau port is implemented in several directions:

Active development of the below-mentioned export routes allowed enhancing volumes of oil handling into tankers in Aktau Port through the KazTransOil JSC's system to over 8.5 million tonnes in 2006.

The Severniye Buzachi (oil treating & pumping unit) - Karajanbas (oil pumping station) inlet oil pipeline was constructed and commissioned on May 31, 2006 to ensure design increase in oil production at Severniye Buzachi field. The pipeline met the growing demand for oil transportation from Severniye Buzachi field through the pipeline grid operated by KazTransOil JSC. Thus, in July 2006 the volume of oil transportation through the Severniye Buzachi-Karajanbas oil pumping station totaled nearly 530,000 tonnes.

The solemn ceremony dedicated to completion of construction of the Atasu-Alashankou oil pipeline's line section was held on December 15, 2005. The pipeline's filling with process oil in the volume of approximately 400,000 tonnes was completed in May 2006.

The implementation of the Atasu-Alashankou oil pipeline construction project is a significant stage of the followed strategy aimed at diversification of oil transportation system and provides petroleum companies with reliable and economically expedient route for oil supplies to the perspective and rapidly growing China's market. At the same time, the oil pipeline enables to use the transit potential of Kazakhstan to transport Russian oil to China. This project was implemented by Kazakhstan-China Pipeline LLP, a joint venture set up on a par (per 50%) with KazTransOil JSC and CNODC, the subsidiary of Chinese National Petroleum Company (CNPC).

To ensure reliable and non-stop receiving and transportation of oil through the Atasu-Alashankou system KazTransOil JSC implemented some works to upgrade and reconstruct the units of the Eastern branch at the Priirtyshsk-Atasu, Karakoin-Atasu area and directly at the Atasu oil-pumping station, the main oil-pumping station of the Atasu-Alashankou oil pipeline.

The Atasu-Alashankou oil pipeline transports oil from the fields of Central Kazakhstan to China. Oil supplies from the western regions of Kazakhstan are also feasible. So, the loading-unloading overpass was constructed in Atasu to receive oil from tank cars and handle oil to the Atasu-Alashankou pipeline. Since July 2006 the oil pipeline has transported 2,161 thousand tonnes.

 

Over 10 years KazTransOil JSC has traveled a large path of evolution and has a great potential for further dynamic development. In future the Company sees unique and perspective projects related to mastering and construction of new routes and upgrading of the existing systems. Their successful implementation casts no doubts as the elapsed decade serves as a bright example.