CPC Kazakhstani Pipeline Recoating is Progressing 600 Meters per Day

On November 8-9, 2011 CPC General Director Nikolay Platonov made a working trip, visiting the Consortium’s Facilities located in Kazakhstan. A flight was made over the route where the 88-km section would be replaced under the Expansion Project, the business situation at Tengiz and Atyrau pump stations was examined.

Nikolay Platonov also got acquainted with the progress of the pipeline major repair work with recoating, covering the 114-km section. The work involving the state-of-the-art know-how and materials conducted on the line pipe section constructed back in the Soviet time will ensure reliable and safe pumping of crude oil through CPC pipeline system throughout its entire designed operation life. There are currently four crews at work, each doing 150 m per day. Therefore, the total daily recoating rate is up to 600 m.

Meetings with Bolat Daukenov, First Deputy Akim of Atyrau Oblast, Tengiz PS and Atyrau PS staff, CPC Eastern Region management and also the contractors’ representatives were held in Kazakhstan. In the course of the dialogue with Mr. Daukenov the parties stated absolute mutual understanding and readiness to further fruitful cooperation, including engagement of additional local labor resources to perform the Expansion Project work. First Deputy Akim pointed out that while being of economic significance, CPC also played an important social role in the life of the region. He emphasized that the Consortium could be an example of socially conscious conduct of business. In 2011 the Consortium allocated over KZT 204 M to the charity program in Kazakhstan.

General Director’s townhall meeting was in a format of an honest and interested dialogue. The Company’s main assets are people – highly professional, experienced and conscientious specialists. One of the Consortium Management’s priorities is to create optimal labor conditions to the employees. In the course of communicating with Nikolay Platonov each person had an opportunity of expressing his/her thoughts and wishes. A feedback between the management and personnel is one of the base factors of the Company’s efficient performance. Townhall meetings make an integral part of the corporate policy contributing to maintaining mutual trust and solidarity, drive for completing the common strategic tasks. The Expansion Project is by all means the central of them today. At the same time it is impossible to overstress the importance of the Operations teams. They are the ones who ensure continuous operation of CPC crude pipeline and generate revenues required to fund the Expansion Project. During the General Director’s visit it was specifically emphasized that the staff needs was the focus of much attention, the permanent item on CPC Management’s and Shareholders’ agenda.

The length of CPC pipeline which connects the oil fields in Western Kazakhstan and the Marine Terminal in Novorossiysk amounts to 1,511 km. CPC Marine Terminal is equipped with single point moorings which allow for a safe tanker loading at considerable distance from the shore, also when the weather conditions are unfavorable.

The CPC Project was developed with allowance for a 2.5 times increase of its initial throughput capacity – up to 67 MMT of oil per annum (76 MMT per annum with drag reducing agents).

The Expansion Project involves an upgrade of the existing and construction of 10 additional pump stations (2 in the Republic of Kazakhstan, 8 in the Russian Federation), six crude storage tanks near Novorossiysk and a third single point mooring at CPC Marine Terminal, and also replacement of the 88-km pipeline section in Kazakhstan with a larger diameter pipe. The total investments in the Project will amount to $5.4 B. The Expansion is planned to be completed in 2015.