Oil transportation

• Increase existing capacity utilisation by making KMG’s oil transportation systems more attractive and competitive
• Improved operating-cost control

Pipeline infrastructure

Kazakhstan’s pipeline infrastructure is owned by JSC KazTransOil – the national oil pipeline operator, its two joint ventures (Kazakhstan–China Pipeline LLP and MunayTas North-West Pipeline Company LLP) and Caspian Pipeline Consortium. The existing pipeline infrastructure in Kazakhstan has adequate potential to support increased oil transportation volumes from promising projects.

JSC KazTransOil (KTO) is the national oil pipeline operator of the Republic of Kazakhstan. The company owns an extensive network of trunk oil pipelines with a total length of 5,372 km, to which virtually all oil fields in Kazakhstan are connected. The Company transports oil to Kazakhstan’s four major refineries, pumps oil for export via the Atyrau–Samara pipeline, transships oil to the CPC and Atasu–Alashankou export pipelines, and ships oil to tankers in the Port of Aktau and by rail. Oil transportation via trunk oil pipelines is supported by 36 oil pumping stations, 67 heaters, and a tank farm for oil storage with a total capacity of 1.4 mln m³. JSC KazTransOil also provides operation and maintenance services for the trunk oil pipelines of Kazakhstan–China Pipeline LLP, MunayTas North-West Pipeline Company LLP, Karachaganak Petroleum Operating B.V., JSC Caspian Pipeline Consortium-K, and JSC Turgai Petroleum, as well as for the trunk water line of Main Waterline LLP.

Kazakhstan–China Pipeline LLP is the owner of the Atasu–Alashankou (965 km) and Kenkiyak–Kumkol (794 km) oil pipelines. The company transports Kazakhstan’s oil and transit Russian oil to China and to the domestic market.

MunayTas North-West Pipeline Company LLP (MT) is the owner of the 449 km Kenkiyak–Atyrau oil trunk pipeline. In 2018, the company started implementing the Kenkiyak–Atyrau pipeline reverse project to support supplies of West Kazakhstan’s oil to domestic refineries and to compensate production declines in the Aktobe and Kyzylorda Regions, as well as to support exports to China totalling up to 6 mtpa. The project cost is KZT 28.6 bln. Within the project, the first start-up complex has been commissioned, and the construction of the second start-up complex is now complete. The project’s completion is slated for Q2 2021.

Caspian Pipeline Consortium (CPC) is an international oil transportation project involving Russia, Kazakhstan and the world’s leading industry players. It was established for the construction and operation of a 1,510 km trunk pipeline (452 km are within Kazakhstan). The CPC oil pipeline is a priority export route for Kazakhstan’s oil supplies, connecting Kazakhstan’s Tengiz oil field with the Yuzhnaya Ozereyevka oil terminal on the Black Sea (near the Port of Novorossiysk). Oil transportation via the CPC pipeline is supported by 15 oil pumping stations, an oil storage tank farm with a total capacity of 1.3 mln m³ and three single-point moorings.

In view of the anticipated increases in oil production from Tengiz and Kashagan, in 2019 CPC shareholders resolved to launch a debottlenecking project for the pipeline system, which is expected to increase the volume of Kazakhstan’s oil transportation to 72.5 mtpa. The project timeframe is 2019–2023, and its cost is USD 600 mln. The project will be financed using CPC’s own funds.

Trunk pipeline oil transportation

In 2020, KMG’s share in the consolidated volume of trunk pipeline oil transportation was down by 3,156 ths tonnes to 64,181 ths tonnes. The decline was driven by the limited oil supply from JSC CNPC International Aktobe Petroleum, after a critical excess of organochlorine compounds was discovered in their oil supply in January 2020, compounded by an overall decline in oil supply amid a drop in oil production from other companies due to natural decline in production from the Kumkol group of fields and OPEC+ restrictions.

Tariff policy

The tariffs for crude oil transportation to Kazakhstan’s domestic market are regulated by the government.

According to Law of the Republic of Kazakhstan No. 204-VI on Natural Monopolies dated 27 December 2018, oil transportation services to support transit via the territory of the Republic of Kazakhstan and exports outside the Republic of Kazakhstan are beyond the scope of natural monopolies.

Oil transportation by sea

Transport assets

NMSC Kazmortransflot LLP (KMTF) is the National Sea Carrier. Its assets include:

• merchant fleet: owned oil tankers: Astana, Almaty and Aktau, each with a deadweight of 12,000 tonnes; and Aframax oil tankers – Alatau and Altai, each with a deadweight of 115,000 tonnes
• marine support fleet: 8 barge platforms of KMG series with a capacity of 3,600 tonnes each
• fleet to support Tengizchevroil’s Future Growth Project: 3 Caspian-class barges (MCV) – Barys, Berkut and Sunkar with a capacity of 5,200 tonnes each, and 3 tugboats – Talas, Emba and Irgiz with a bollard pull of 40 tonnes-force each.

The main current routes for oil transportation by sea:

• Routes in the Caspian Sea waters
• Routes in the Black Sea and Mediterranean Sea waters

Performance highlights

In 2020, the total volume of oil transportation by sea decreased significantly by 16.2% year-on-year to 8,990 ths tonnes, mainly due to lower volumes of transportation in the Mediterranean Sea as a result of downtime while waiting for loading, as well as unfavourable weather conditions.

In March 2020, KMG provided support to KMTF in concluding an agreement with COSCO Shipping for transporting outsized cargoes from South-East Asia to Kazakhstan.

From April to June 2020, a total of 25 outsized cargoes weighing about 3,600 tonnes in total were successfully transported from the Port of Constanța in Romania to the Port of Atyrau in Kazakhstan for KPI Inc.’s petrochemical project under construction in Atyrau. KMTF engaged a total of 42 vessels (both owned and leased), including 6 barges, 24 river and 12 sea tugboats.

Under Tengizchevroil’s Future Growth Project (FGP), KMTF transported about 90 outsized cargoes (57,000 tonnes in total) during the navigation seasons of 2018–2020. With KMTF’s withdrawal from the project in 2020, an MCV ship Barys will be converted into a container ship. The conversion started in Q3 2020; the ship is planned to be used for container shipping services along the Aktau–Baku–Aktau feeder line.