The Meeting of the Board of Directors of Caspian Pipeline Consortium-R and Extraordinary General Meetings of CPC-R and CPC-K Shareholders took place in Moscow on February 24-25.
In the course of the Meetings the participants discussed the Expansion Project implementation progress. All the Project work will be completed before the end of 2016. It was noted that the Expansion Project which was being financed by the Consortium’s own funds would not just stay within the provided budget – USD 5.4 Billion, but a certain saving was also expected.
Significant growth of pumping volumes has a favorable impact on the Consortium’s revenue. As part of the report on compliance with the Treasury Policy the possibility of repaying up to USD 1 Billion to the Shareholders in 2016 was presented, the debt dating back to the CPC Initial Construction Project.
The speakers pointed out to the Consortium’s great success in operation safety and labor protection.
In 2015 CPC staff performed the work without any serious injuries and incidents and keeps on working in 2016 maintaining the same indicators.
A long-term program to reinforce anti-terrorist actions was reported to the Shareholders; it is proposed to spend over USD 20 Million to implement the program over the period of three years.
The Meeting participants also discussed other matters of the routing operation business of the Companies.
A new membership of the Board of Directors was elected at the Extraordinary Meeting of CPC-R Shareholders.
CPC pipeline system is one of the largest investment projects in the energy industry with participation of foreign capital on the CIS territory. The length of the pipeline connecting the oil fields in Western Kazakhstan with the Marine Terminal near Novorossiysk is 1,511 km. CPC Marine Terminal is equipped with single point moorings which allow for safe tanker lifting at a considerable distance from the shore, also when the weather conditions are unfavorable.
The Expansion Project includes rehabilitation of 5 existing and construction of 10 additional pump stations (2 in the Republic of Kazakhstan and 8 in the Russian Federation), six new storage tanks (100,000 cu.m each) in addition to the existing four near Novorossiysk and a third SPM at the CPC Marine Terminal, and also the replacement of an 88 km pipeline section in Kazakhstan with a larger diameter pipe. The total amount of the Project investments will be US$ 5.4 billion.
CPC Shareholders: Russian Federation (represented by Transneft – 24% and CPC Company – 7 %) – 31%; Republic of Kazakhstan (represented by KazMunayGaz – 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% и Oryx Caspian Pipeline LLC – 1.75%.