Chevron breaks ground on Caspian pipeline

$5.4 billion expansion will double oil handling capacity to 1.4 mn bpd

The CPC pipeline will carry crude oil from western Kazakhstan to a dedicated terminal in the Black Sea.
The CPC pipeline will carry crude oil from western Kazakhstan to a dedicated terminal in the Black Sea.

Hydrocarbon supergiant Chevron Corporation announced yesterday that ground had been broken at Atyrau, Kazakhstan, for construction of the Caspian pipeline.

The Caspian Pipeline Consortium (CPC) marked the start of the construction phase of the $5.4 billion expansion of the Caspian pipeline with a groundbreaking ceremony.

The capacity of the 1,500 km pipeline, which carries crude oil from western Kazakhstan to a dedicated terminal in the Black Sea, will increase to 1.4 million barrels per day (bpd) from its current capacity of 730,000 bpd.

The project will be implemented in three phases with capacity increasing progressively from 2012 to 2015.  It will consist of the refurbishment of the existing five pump stations, the addition of 10 new pumping stations, the replacement of an 88 km section of the line, six new storage tanks and the addition of a third offshore mooring point at the Black Sea terminal, 10 km north of the Port of Novorossiysk. CPC awarded all the major construction contracts in May 2011.

Chevron, one of the largest CPC shareholders, is providing project management services to the project. Andrew McGrahan, President of Neftegaz, Inc., said, "CPC is a key strategic asset for Chevron and adds to our strong position in the region. Chevron greatly appreciates the efforts of all shareholders, especially the representatives of Transneft and KazMunaiGaz, in reaching this important landmark."

McGrahan added, "CPC is a model of cooperation between Russia and Kazakhstan and is an indication of the confidence we have in Russia and in oil transportation from the Caspian region. This groundbreaking event represents years of dedication and commitment to expanding the commercial links between the two countries and sends a powerful signal that Russia and Kazakhstan are countries where major, long-term capital investments can be made with confidence."

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