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Suspension of SPM-2 Operation

20220322-3.jpgDiver examination by the MT maintenance contractor OOO Transneft-Service of the SPM equipment at the Marine Terminal near Novorossiysk after a storm revealed damage of sections 9 and 13 of the SPM-2 internal hose.

The above damage is critical and makes it impossible to ensure safe operation of the device. In this context, CPC is forced to suspend operation of the above SPM.

Pursuant to the MT operation regulatory documents, CPC has an emergency set for replacement of the damaged hoses. However, contracting of SPM spare parts supply in the current market situation may be rather difficult. So, the Consortium Management has to announce potential triple reduction in the transported oil quantities nominated by the shippers in the nearest future.

Repairs may take a considerable time due to adverse weather and wait of tanker nomination for flushing.

Please be reminded that yesterday an extraordinary inspection following weather improvement revealed damage in the form of displacement of the reinforcement carcass of one of the SPM-3 floating hoses. In this context, it was decided to decommission temporarily the above SPM for flushing and repair. Timely detection of the fault prevented the risk of oil spill into the Black Sea.

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The CPC Pipeline System is one of CIS largest energy investment projects that involves foreign capital. The length of the Tengiz – Novorossiysk pipeline is 1,511 km. This route moves over two thirds of all Kazakhstan export oil along with crude from Russian fields including those in the Caspian region. CPC Marine Terminal is equipped with three Single Point Moorings (SPM), allowing tankers to be loaded safely at significant distance offshore, including in poor weather conditions

CPC Shareholders: Federal Agency for State Property Management represented by Transneft (trustee) – 24%, CPC Company – 7%, KazMunayGas – 19%; Kazakhstan Pipeline Ventures LLC – 1.75%, 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%, and Oryx Caspian Pipeline LLC – 1.75%.