250 Millionth Ton of Crude Oil Lifted from CPC Marine Terminal

On February 26 the 250 millionth ton of crude oil was lifted from the Marine Terminal of Caspian Pipeline Consortium near Novorossiysk since the commencement of the CPC pipeline system operation.

CPC connects the Western Kazakhstan fields with the Russian Black Sea coast. The first tanker was loaded at CPC Terminal on October 13, 2001. Since 2004 Kropotkin Pump Station (PS) in Krasnodar Krai has been receiving the Russian crude oil into the system. In 2005 CPC reached the designed capacity of the first stage of the system development. Last December CPC Marine Terminal achieved the maximum monthly value of crude oil lifting – 3.21 M tons (over 25 M barrels). In total last year CPC pumped through its pipeline system the record 36.47 M tons of crude oil, Marine Terminal lifted 34.92 M tons of crude oil, which is also the maximum annual value. As of today 2323 tankers have left the single point moorings of CPC Marine Terminal loaded with crude oil during the past 9 years without a single accident, with compliance with all environmental and safety requirements.

“A quarter of a billion tons of crude oil lifted is CPC landmark achievement on the threshold of launching the Expansion Project implementation scheduled for this spring, - says Nikolai Platonov, Consortium’s General Director. – It means that the company possessing the unique process and staff potential is functioning today like a well-oiled machine, efficiently and safely resolving the task of shipping the growing volumes of Kazakhstani and Russian crude oil to the world markets at the limits of the CPC Project first stage capacity. At the same time we forge ahead, we permanently improve the personnel qualification, efficiency and reliability of the equipment and control systems. Thus, last year the new 130km section of the Company’s trunk crude pipeline from Tengiz Pump Station in Kazakhstan was completed and commissioned, increasing the capacity and enhancing the safety of the pipeline system. Considerable attention was paid to the further improvement of management in the sphere of labor protection and industrial safety in the Company – CPC operation business was certified last year for OHSAS 18001:2007 Standard. I would like to note that the achievement of 6 million hours worked by CPC staff, its contractors and subcontractors with just one case of minor lost time injury, fortunately not dangerous to the employee’s health, became the Company’s great success in labor safety in 2010.
However, the key item of the Consortium’s today agenda is, certainly, the commencement of the implementation of the Company’s Expansion Project approved by the Shareholders. I think that CPC achievement of impressive performance indicator of 250 million tons of pumped oil is a solid foundation for the Company’s further development”.

On December 15 last year the Final Investment Decision on the Project to more than double the mechanical capacity of the Caspian Pipeline Consortium’s pipeline system was made in Moscow. Having signed the documents, Sergey Shmatko, Minister of Energy of the Russian Federation, Lyazzat Kiinov, Deputy Minister of Oil and Gas of the Republic of Kazakhstan and CPC General Director together with the representatives of all Consortium’s Shareholders launched the Project active phase. Construction will start this spring.

CPC Expansion Project providing for the increase of the pipeline system capacity up to 67 MM tons of crude oil per year, assumes construction of 10 additional pump stations (2 in the Republic of Kazakhstan, 8 in the Russian Federation), six storage tanks near Novorossiysk and the third single point mooring at CPC Marine Terminal and also replacement of an 88km section of the pipeline in Kazakhstan..

CPC Shareholders: Russian Federation (represented by Transneft – 24% and CPC Company – 7 %) – 31 %; Republic of Kazakhstan (represented by KazMunaiGaz – 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%.