Kazakhstan-China Pipeline LLP

The development of partnership relations between Kazakhstan and China in the sphere of power generation started as early as the end of the ХХ century from the signing of

the Master Agreement between the Ministry of Energy and Natural Resources of the Republic of Kazakhstan and the China National Oil and Gas Exploration and Development

Corporation (CNPC) on the projects for development of fields and construction of oil pipelines. Thus the foundation for the creation of the Kazakhstan-China transcontinental

crude oil pipeline, intended for the transportation of commercial crude oil from the fields of the Western and Central Kazakhstan to the People’s Republic of China was laid.

Launching of the giant oil pipeline was preceded by the meticulous work for the formationof the necessary documentary base, selection of personnel, search for the funding sources,

etc. Thus, the conclusion of the Master Agreement between the Ministry of Energy and Natural Resources of the Republic of Kazakhstan and the Chinese Corporation CNPC, dated September 24, 1997, on the projects for development of fields and construction of oil pipelines, was followed in spring of the year 2003 by the commissioning of the

Kenkiyak-Atyrau pipeline. After a year, on May 17, 2004, the Framework Agreement between the Government of the Republic of Kazakhstan and the Government of the

People’s Republic of China on development of comprehensive cooperation in oil and gas fields was concluded in China, in the presence of the President of the Republic of

Kazakhstan Nursultan Nazarbayev and the Chairman of the People’s Republic of China Hu Jintao. 

At the same time the Agreement on the main principles for the construction of the Atasu-Alashankou pipeline was signed between the National Company KazMunaiGaz

CJSC and CNPC. On June 30, 2004 by the decision of KazTransOil JSC and the China National Oil and Gas Exploration and Development Corporation (CNPC) Kazakhstan-

China Pipeline LLP was incorporated on equal shares conditions for engineering, construction and operation of the pipeline.

It is noteworthy that the pipeline construction is a unique project by its scope and complexity. The construction of the pipeline required the assistance of the best

Kazakhstani and Chinese specialists. More than 2400 persons and more than 1300 heavy equipment units were involved in the project at the height of its realization. The pipeline

route often passed through very difficult sections and sands, marshy lands, rocky soils.

Herewith, an average pipe burial depth throughout the pipeline was equal to 2.2 meters. Additional difficulties were represented by severe climatic conditions: considerable

temperature drops, constant strong winds, high level of flood and rain waters. However, due to well-coordinated and dedicated work of all the participants of the Project,

all those difficulties were overcome and laying of an almost 1000 km pipe was finished in the record-breaking time – on November 14, 2005 welding of the “golden” pipeline seam

was triumphantly completed in the frontier zone. After a month in a solemn atmosphere

the President of the Republic of Kazakhstan Nursultan Nazarbayev launched the Atasu-Alashankou international trunk crude oil pipeline.

“When I spoke of it for the first time in the year 1997 everybody thought it was a utopia.

And today we are launching a 1000 km pipe, costing more than 800 mln. US dollars. The whole land is being revived, economy of the region grows…”, - remarked that time the

Head of the State.

The Atasu-Alashankou pipeline made it possible to develop the Kazakhstan infrastructure and to draw the domestic resource bases nearer to the world sales markets. Apart from

an increase of export volumes, Kazakhstan gained such social and economic effects, as the further development of exploration of oil fields and lands along the pipeline route,

an increase of government revenues at the expense of remitted taxes, development of the corresponding materials and equipment production, an increase of labor resources and

strengthening of economic and political relations with China. Today the pipeline route with the length of 962.9 km passes through the territories of the Karaganda, East Kazakhstan and Almaty oblasts and Xinjiang Uygur Autonomous region. The actual carrying capacity of the Atasu-Alashankou pipeline makes up 10 mln. tons of oil per year, with the further increase up to 20 mln. tons. Thus, the Atasu-Alashankou pipeline became the first export crude oil pipeline of the world class, built in the independent Kazakhstan.

The Kenkiyak-Kumkol pipeline was the third part of the “Kazakhstan-China” intergovernmental project. In December 2006 the Agreement on the main principles for

the construction of the second stage of Kazakhstan-China pipeline was signed between the Chinese CNPC and the National Company KazMunaiGaz JSC. And in spite of the

following years, in October 2009 oil flew for export through the trunk pipeline with the length of 793 km. According to the forecasts the Kenkiyak-Kumkol section alone will

bring for Kazakhstan taxes, amounting to 60 billion tenge for the period from 2010 to 2020.

However, for all positive forecasts to come true it is necessary to carry out the work, directed to increasing of the pipeline capacity. Namely for this purpose the pumping

station No. 11 was commissioned recently in the city of Ucharal. The contract for the construction of PSD-11 was signed the year before. The project consists of the pumping

station itself and the system of external power supply, including an external power supply line with the length of 145 km and upgraded substations Aktogai and Konyrat. Currently

all construction and installation works at the station are completed. 30 jobs will be created for its operation. At the same time a decision is taken on the construction of PS-8 and PS-10 in the years 2012-2013 for attaining of the set goal of increasing throughput volumes of the Atasu-Alashankou pipeline up to 20 mln. tons of oil per year.