The consortium that operates the pipeline that Kazakhstan uses to export most of its oil could leave the route almost unusable for up to two months due to infrastructure damage caused by a recent storm. I said there is.
The Caspian Pipeline Consortium (CPC) said in a statement on March 22 that two of the three tanker loading facilities at Novola Siska, Russia’s Black Sea Port, will be able to undertake oil at a safe distance from the shore. Said that.
CPC CEO Nikolai Gorban told reporters on March 23 that oil loading at Novorossiysk Terminal had stopped altogether for the time being. He said it could supply oil to a 1,500-kilometer pipeline starting from Kazakhstan’s huge Tengiz oil field on the eastern coast of the Caspian Sea, but shipments in March and April would be one-fifth of normal. rice field.
The CPC pipeline carries oil from western Kazakhstan to the Black Sea port. (Map: Transneft)
The consortium said it would have difficulty finding spare parts for damaged tanker loading facilities due to international sanctions imposed on Russia in response to the invasion of Ukraine. According to Russia’s state news agency TASS, Russia’s deputy energy minister, Pavel Sorokin, said oil exports through the CPC pipeline could fall by about one million barrels daily in the two months of repairs.
Analysts quoted by the Financial Times are skeptical of allegations of storm damage, which can be done by any of the Western partners of the consortium, including major Chevron and Exxon, who own 15% and 7%, respectively. Their own inspection that said they did not.
“If a storm shuts down the infrastructure, or if Russia shuts down the infrastructure, Russia can decide when to restart the infrastructure,” said ClearView Energy Partners Managing Director, a Washington-based research group. One Kevin Book told the Financial Times.
This reduction in deliveries will be particularly painful for Kazakhstan. More than two-thirds of a country’s oil exports go through the CPC pipeline.
In 2021, CPC shipped 60.7 million tonnes of oil through the Novorossiysk Terminal. That’s about 510 million barrels. Of that total, 53 million tonnes came from the Kashagan, Tengiz and Karachaganak fields in western Kazakhstan. An additional 7.7 million tonnes were delivered by a Russian company.
Kazakhstan’s Ministry of Energy said on March 23 that it was “in discussions with the CPC on when to resume operations at the maritime terminal,” while considering alternative routes for oil exports.
However, experts say that there are few feasible options.
Energy journalist Oleg Chervinsky told Eurasianet that the flow of oil would be directed north from the CPC pipeline to Russia from the Atyrau-Samara pipeline. This means mixing high quality Tengiz crude oil with a relatively impure Russian Ural blend. It is currently trading at about two-thirds of the value of the most commonly cited Brent blend in the international market.
Crossing the closed Caspian Sea by sea and supplying oil to the Baku-Seihan pipeline is only some way to deal with export shortages due to the limited processing capacity of Aktau’s port of Kazakhstan. Hmm.
“Unfortunately, stopping shipments from the Novorossiysk terminal will reduce oil production in Kazakhstan, reduce exporters’ income and reduce tax revenues further down the chain,” he said.
By Eurasianet.org
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