During a working visit to Kazakhstan Mr. Nikolay Gorban, CPC General Director gave a brief press conference and responded to several questions from Kazakh and international mass media representatives. The event was also attended by Mr. Kairgeldy Kabyldin, Deputy General Director.
SOME OUTCOMES 2017 AND PUMPING VOLUMES:
In particular, General director informed that in late 2017, after commissioning PS-2 in Kalmykia, the Expansion Project was practically finalized to expand CPC capacities to 67 MTA. Achieving the planned lifting volumes and crude shipments depends on Shippers injecting oil to CPC-K and CPC-R. At the moment CPC system experiences capacity surplus.
General director has noted Y2017 was completed by CPC with record high operational indicators: Tengiz – Novorossiysk pipeline system exported 55,1 MT’s. Thus, the 2017 annual shipments have exceeded Y2016 results by 10,8 million tons. Then the CPC Marine terminal shipped 44,3 million tons of crude.
In 2017 CPC-K system transported 49 634 649 tons (net) of oil from Kazakhstan producer companies including from Tengiz field - 28,8; Karachaganak field – 10,6; Kashagan field – 7,4.
Nikolay Gorban also noted the CPC Blend is in stable demand on the market and has an established consumer pool. Crude transportation increase perspectives through CPC line were commented by general director as: ’Increasing oil transportation and shipment is inevitable with oil production growing in the Republic of Kazakhstan and Russian Federation oil fields.’
Anyway he stressed the key oil shippers using CPC trunk pipelines system are the producing companies operating on West Kazakhstan fields, Tengiz, Kashagan, Karachaganak, PJSC Lukoil Caspian fields. Hence, these fields will serve base for increasing oil movements along CPC system, especially Tengiz and Kashagan.
Consortium head informed journalists that in line with shippers’ nominations forecast for Kazakhstan oil movement through CPC Tengiz-Novorossiysk pipeline in Y2018 is 60 MT, Russian producers will ship 7 million tons.
Responding on the matter of expected crude volumes from Kashagan field Nikolay Gorban has said: “CPC crude movement plans are based on shippers’ nominations. Nomination accepted for 2018 is 13 million tons”
SOME FINANCIAL RESULTS
Financial activities of Caspian Pipeline Consortium are governed by the payment schedule defined by CPC Shareholders. On March 29, 2018 CPC paid the debt of 310 MM USD to the Consortium Shareholders, of which 268 MM USD were paid by CPC-R, and 42 MM USD by CPC-K.
Overall, CPC plans to repay 1.3 Billion USD in 2018.
It is planned that such repayment rate will allow CPC to clear the debt by 2020 and to start paying dividends to the Shareholders.
OIL QUALITY
In response to the question related to CPC blend quality, Nikolay Gorban said that there had been no material changes to CPC Blend since Kashagan and V.Filanovsky fields commissioning.
The average quality properties at the time of oil loading at CPC Marine Terminal in 2017 are: density 46.2 oAPI, sulfur content 0.54 mass% (for information: 46.5 oAPI, 0.52 mass% respectively in 2016). Mercaptans content was no more than 20 mg/kg. “We do not expect any critical changes to CPC Blend quality in 2018”, Nikolay Gorban noted.
In addition, it was stated that CPC Oil Quality Bank has been successfully functioning in the CPC system since 2002 and there have been no changes in its operation principles since then.
Development of the concept and its practical implementation involved participation of independent international consultants that have considerable experience in this area. Oil quality bank is a tool of penalties and compensations to oil producers depending on the quality of crude they supply to the system.
CPC CAPACITY EXPANSION PROJECT
Nikolay Gorban also commented to the media that current mechanical capacity of CPC crude pipeline is 67 MTA. “The use of DRA is currently irrelevant. With a respective shareholder decision there are various capacity increase options under review” – he noted.
“Expansion Project is practically complete. April 18 will see a ceremony to commission the last pump station, PS-2, in Kalmykia.” - Consortium head pointed out.
Kazakhstan mass media were particularly keen to know as to how, while constructing the new facilities and further operating the upgraded CPC system, the environmental safety conditions will be observed in the Consortium facilities regions.
General Director informed mass media all Expansion Project facilities were built strictly in compliance with the approved design, they all received Glavgosexpertiza (Main state expert review) conclusion and state environmental expertize having obtained all pertinent approvals from state supervisory and regulatory authorities.
Expansion project included the construction of 10 new pump stations and refurbishment of 5 existing stations and marine terminal facilities featuring:
• Zero waste-water discharge to environment. All PSs use water treatment to satisfy code norm requirements for industrial and rainwater and domestic effluents at treatment facilities. Treated water is supplied to isolated evaporation ponds within the pump stations and MT tank farm;
• Due to operational specifics the new PS have actually no emission sources since new stations do not have crude storage tanks. External power sources are used, energy saving program has been developed and in place. So atmospheric air impacts are now mitigated.
CPC has long ago introduced waste management system operating successfully, contracts were concluded with specialist entities to transfer all kinds of wastes to them. Company does not own polygons or recycling sites. Only temporary storage on designated sites in PS and MT areas, with wastes removed from such sites on regular basis. Company also pursues principle of random waste collection.
CPC makes best attempts sending wastes for re-cycling aimed at impact mitigation and not allowing disposal in the environment, it monitors rigorously the contractors receiving wastes.
CPC has a system of industrial environmental monitoring (IEM). IEM activities are aligned with area nature conservation authorities. The outcome of IEM confirms permissible level of environmental components impact. CPC has functional and unprecedented in Russia fiber optic system for control and data acquisition, i.e. SCADA system. Its main purpose is to assure operational control and management of crude pumping process, safe functioning and management of all CPC facilities. The System captures all pipeline status parameters in real-time mode. SCADA helps promptly resolve the task of leak detection in any pipeline segment what enables timely and fast response by CPC emergency response units.
All CPC staff and contractors receive continuous training and environmental safety inductions.
“Company has defined accountability for environmental protection violations” –General Director has emphasized.
CPC FACILITIES EXPANSION PROJECT IN KAZAKHSTAN
The consortium head has made specific focus on activities implemented as part of CPC expansion project in the Republic of Kazakhstan.
“In general, if we take the figures of 2013 as a basis, the efficiency of the Expansion Project and new facilities commissioning in 2017 in the Kazakh section was impressive 73%.” – Nikolay Gorban has noted.
He also informed that Expansion Project work in Kazakhstan started in 2011. Contractors replace 88 km pipeline segment, upgraded PS Atyrau and PS Tengiz, built two new stations, i.e. APS-4 and APS-3A, installed external power supply facilities.
Project Management was assigned to JSC OC KazMunaiGaz - LLP Kazakhstan Pipeline Ventures, based on construction contracts activities were performed by JSC OGSC KazStroyService, LLP PromStroyEnergo, Telvent Energiya S.A., LLP Honeywell - automatic control systems et al.
CPC-K sites employed 328 workforce.
CPC-K SOCIAL RESPONSIBILITY
Mr. Kairgeldy Kabyldin, CPC Deputy General Director also attending the event pointed out the 4 social facilities including veterans part refurbishment are scheduled to be completed in 2018. YY 2017-2018 budget is 1 220 083 998 Tenge.
Traditionally, low-income residents will continue receiving support and ecological projects will be further implemented - 32 939 786 Tenge.
“This year will see a school built in settlement Zhastalap in Kurmangazy district; 3 kindergartens: in Atyrau, in Issatay district (settlement Akkistay) and Kurmangazy district (settlement Akkol); and the Great Patriotic War Veteran alley will be upgraded in settl. Makat” – K. Kabyldin further clarified.