CPC guarantees efficient and environmentally safe movement of crude oil

The Project is designed to increase the trunk pipeline capacity

CPC commissions SPM3

Caspian Pipeline Consortium has commissioned the third single point mooring (SPM-3) for commercial operation at its Marine Terminal near Novorossiysk. The new facility was started up on February 4 in a milestone event marking progress of Expansion Project Phase 1. At 12:30, the tanker ENERGY SKIER with a deadweight of 159,150 tons began commercial oil lifting from SPM-3.

The official SPM commissioning ceremony was attended by the CPC Management led by General Director Nikolai Brunich and Shareholder Companies’ representatives, namely, Transneft Vice-President Mikhail Barkov, , Chevron Neftegaz Inc. President Andrew McGrahan who represented the Eurasian division of Chevron, and KazTransOil Deputy General Director for Development Bulat Zakirov. Guests of honor included Vladimir Chepel, Chairman of the Krasnodar Krai Legislative Assembly's Committee for Fuel & Energy Complex, Transport and Communications, and Andrei Fonarev, Deputy City Mayor of Novorossiysk.

Transneft Vice President Mikhail Barkov congratulated those present on behalf of the Russian Government Shareholder, commenting that the event marked the start of a whole series of significant milestones for CPC about to take place this and next year. Andrew McGrahan, speaking on behalf of Chevron which managed the SPM installation, focused on strict compliance with industrial and environmental safety during construction activities and expressed his confidence that all other Expansion Project events would be held at an equally high level.

The chief executive officer of CPC Nikolai Brunich stated: “Today is a day which is very important for CPC. We are commissioning SPM-3 which will allow to increase oil liftings up to 70 million tons per year.” He added that the Expansion Phase 1 scope in Russia was currently 99% complete, with miscellaneous facilities being readied for commissioning.
The third SPM will allow to increase export oil liftings when one of the SMPs is decommissioned for annual maintenance. Now, when one of the SPMs is taken out for annual preventive maintenance, the liftings will continue from the two other operating SPMs. The newly-commissioned buoy is improved design. Its multistage leak prevention allows to load heavy-tonnage vessels and mitigate the accident risk at sea, while its special design (turret) ensures safer maintenance.

The Marine Terminal has loaded over 340 million tons of oil since the mainline pipeline was first commissioned.

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%.