CPC guarantees efficient and environmentally safe movement of crude oil

The Project is designed to increase the trunk pipeline capacity

CPC Signs Cooperation Agreements with Regions Before Expansion

CPC signed cooperation agreements with host regions crossed by the pipeline at the Sochi 2010 International Investment Forum held on 16-19 September. The documents were signed by the Krasnodar Krai Administration, the Stavropol Krai Government and the Mayor of Novorossiysk.

The key subject matter of the agreements is a number of issues related to the CPC Expansion Project more than doubling its throughput capacity. Under the signed agreements CPC commits to have the authorities agree to the location of Expansion project facilities, duly pay taxes and other charges to national budgets at all levels, contract local construction contractors on a bidding basis, create jobs for qualified local people and continue providing sponsorship aid in the host regions crossed by the pipeline.

The regional and the local authorities in their turn commit to assist CPC with the land allocation process, expert reviews and sign-offs and construction and commissioning permitting related to Expansion facilities and to provide information support.

The documents make a special focus on compliance with environmental law and environmental mitigation. The parties commit to do their best within their control to prevent and respond to emergencies if any occur on CPC facilities.

The agreements stress that their implementation is aimed at strengthening the financial and economic position, enhancing the production potential and improving the investment climate in the regions and sustaining the social stability and increasing the prosperity of local populations.

Earlier CPC had signed similar agreements with the Republic of Kalmykia and the Astrakhan Region.

CPC Expansion that will increase the CPC capacity to 67 MTA will be completed in 2014. The Expansion project is currently estimated to cost USD4.6 bn. The project includes 10 new oil pump stations (2 in Kazakhstan, 8 in Russia), six crude oil tanks near Novorossiysk, a third single point mooring at the CPC Marine Terminal, and 88 km pipeline replacement in Kazakhstan.

CPC Shareholders: Russian Federation (represented by Transneft – 24% and CPC Company – 7 %) – 31%; Republic of Kazakhstan (represented by KMG – 19% and Kazakhstan Pipeline Ventures LLC – 1.75%) – 20.75%; Chevron Caspian Pipeline Consortium Company - 15%, LUKARCO B.V. - 12.5%, Mobil Caspian Pipeline Company – 7.5%, Rosneft-Shell Caspian Ventures Limited – 7.5%, BG Overseas Holding Limited - 2%, Eni International N.A. N.V. - 2% and Oryx Caspian Pipeline LLC – 1.75%