CPC guarantees efficient and environmentally safe movement of crude oil

The Project is designed to increase the trunk pipeline capacity

CPC General Director N. Gorban’s comments for mass media

On October 12, 2017, Caspian Pipeline Consortium completed all work under the CPC Expansion Project in Isatai district, Atyrau Oblast, the Republic of Kazakhstan. The last one of the Consortium’s pump stations built in Kazakhstan - A-PS-3A - was put into operation at the ceremony.
Closing the event, Nikolay Gorban, CPC General Director, answered the questions of Russian and international reporters.
In response to the question about capabilities of the new pump station with regard to transportation of Kashagan volumes, Nikolay Gorban noted that at the current stage of Kashagan field development CPC is ready to accept any of its volumes for transportation to the CPC Marine Terminal.  A-PS-3A commissioning will help to pump 52.5-60 MMTA from Kazakhstan.   
He also advised that new 186 work places were created due to the PS commissioning.  The cost of PS completion, including survey, design, construction, construction of a rotation camp, power sub-station and other auxiliary facilities, amounts to KZT 92 billion.
CPC CEO also advised reporters that CPC remitted to the Kazakhstan budget KZT 21.15 billion in 2016, and for 9 months of 2017 tax payments to Kazakhstan reached KZT 14.61 billion. The current forecast of approximate tax payments in 2017 is KZT 24.97 billion. 
From the beginning of 2017 through the end of September, 40,256,270 gross tons of crude oil were loaded into 385 tankers, with 36,511,719 gross tons of crude oil of Kazakhstani Shippers, and 3,744,551 gross tons of crude oil - of Russian Shippers. Please note that more than half a billion tons of crude oil have been lifted for export over the whole period of CPC operations.
To the question of market experts about potential scenarios of dramatic fall of volumes from Kazakhstani fields in 2017-2018 Nikolay Gorban responded: “Production volumes depend on crude producers. We are not aware of any dramatic drops off, we are responsible only for timely transportation of crude oil injected into the pipeline”.
He also noted that it is too early to make accurate forecasts for 2018.  Everything depends on shippers and their potential adjustment of nominations for the next year.   The system is ready to accept volumes as per its design capacity of 67 MMTA.
At the press-conference CPC also notified that in January-September 2017 CPC accepted 5,216,000 tons from Kashagan; 7,865,000 tons from Karachaganak and  21,432,000 tons from Tengiz. 
Commenting on the CPC Blend quality, Nikolay Gorban said that there had been no significant change in the CPC Blend quality when the system commenced accepting the Kashagan and Filanovsky crude.
Average specifications of the product lifted at the Marine Terminal in 2017 are as follows:  density 46.2 oAPI, mass sulfur content 0.54% (for reference: in 2016 - 46.5 oAPI and 0.52% respectively). 
In response to the question about potential changes in the share of crude volumes from different Kazakhstani fields transported via the CPC system due to pending Kashagan crude oil output of 350,000-370,000 bbl. per day, Mr. Gorban said:  “Shippers from Kashagan will deliver their crude to the CPC system as they are doing now in accordance with the preferential capacity rights assigned to them by CPC Shareholders; therefore, the share of crude oil from other fields will not change considerably”.
“We are monitoring the situation and analyzing the potential risks. Our shareholders participate in the risk analysis. Nowadays, there is no risk that these sanctions will be immediately applied against or imposed on CPC”, Mr. Gorban told reporters.
“There is still no clarity with regard to interpretation of certain provisions of the law. Thus, we believe that the final conclusion on whether the law applies to CPC operations is premature”, he stressed.
CPC General Director also advised that he does not see any link now between sanctions and debt repayment to Shareholders. In response to the question about the impact of sanctions on CPC QB settlements, he noted that CPC was not handling QB settlements. 
Mr. Gorban informed reporters that as part of Expansion Project, PS-2 in Kalmykia would be commissioned after A-PS-3A. “We plan to start the PS comprehensive testing with oil in late November. The exact time of PS start-up will be determined based on test results”, he stressed.
Mr. Gorban advised that “CPC EP expenses in 2017 are in line with the approved budget (USD 150 mln)”. He also said that the CPC 2017 investment program would remain the same at USD 70 mln.
Commenting on the shareholder debt repayment, Mr. Gorban pointed out that in its financial performance CPC was governed by the debt repayment schedule provided by CPC Shareholders.  In 3Q 2017, CPC will repay USD 320 mln of its debt. “The amount of debt repayment in 4Q 2017 will be determined later by December, it is still early to make any forecast.  All depends on the volumes of crude oil delivered by oil producers and respective CPC earnings,” he stressed. 
Environmental and safety issues were in the focus of the press-conference.
The Company’s international status helps CPC to review and adopt the best practices of the Consortium’s partners all over the world. Even at the ICP stage due to the participation of leading international oil and gas companies, CPC was able to use state-of-the-art technologies and equipment, international standards for management, design, construction and operation of crude oil pipeline facilities.
A complex of environmental measures was developed specifically for the CPC pipeline system. Costs of implementation of up-to-date environment-friendly technologies make up almost 12% of the overall pipeline system construction budget. The following should be mentioned among the above technical solutions: use of pipes with the thicker walls to protect the Caspian and Black Seas coastline, construction of water crossings with horizontal directional drilling, installation of additional protection structures for the crude oil pipeline, etc.
Thanks to the implementation of Expansion Project, the CPC pipeline system has become even more reliable, environment-friendly and safer. All PS's have closed drains, sewage treatment facilities for household and industrial wastewater. Commissioning of the surge relief system and electric engine soft start is one of the advanced solutions enhancing safety.
The upgrade of SCADA (supervisory control and data acquisition system) significantly improved the operational reliability of the CPC pipeline system.  The data transfer rate along the route increased 25-fold.