03.07.2005 Chinese president comes to Kazakhstan on official visit: http://www.tass.ru
ASTANA, July 3 (Itar-Tass) -- Chinese President Hu Jintao came to Astana on Sunday on an official visit. On Monday he will meet with Kazakh President Nursultan Nazarbayev, Prime Minister Danial Akhmetov, Senate Chairman Nurtay Abykayev and Majilis Chairman Ural Mukhamedzhanov to discuss trade and economic cooperation, a source in the Kazakh Foreign Ministry press service told Itar-Tass. They will also ponder international and regional problems, including the situation in Central Asia and the fight against terrorism, separatism and extremism, and contacts in the United Nations and the Shanghai Cooperation Organization. The negotiations will result in signing of several documents, including the agreements on energy, transport and border cooperation. Nazarbayev and Hu will sign a joint declaration. Kazakhstan is Russia’s first runner-up in Central Asian and East European trade with China. Last year’s trade amounted to $4.5 billion.

03.07.2005 Kazakhstan supply key to oil artery: http://www.thestandard.com.
The first phase of the China-Kazakhstan oil pipeline project is slated for completion by the end of this year with the goal of supplying the mainland with 10 million tonnes annually from 2006. But due to uncertainty over Kazakhstan's commitment to provide long-term oil supplies, the mainland is still hesitating over an ambitious plan to build an oil artery connecting its remote west to the energy-starved east. A need to secure more oil supply to feed the pipeline may explain why China National Petroleum Corp is among a group of oil firms reportedly looking to buy Canada-based PetroKazakhstan last week. According to the Financial Times, CNPC, along with oil firms from Russia and India are interested in bidding for PetroKazakhstan, which has assets in Kazakhstan and is valued at some US$2.4 billion (HK$18.72 billion). China is depending on Kazakhstan crude to fulfill its ambition to link oil produced in the remote west to booming oil-consuming regions in the east. Mainland companies now produce some seven million tonnes of crude oil annually in Kazakhstan, according to Bloomberg. This is insufficient to meet demand of the first phase of the pipeline. It is not known how much oil can be supplied from Kazakhstan as it currently exports to Europe and Russia. The 3,000-kilometer pipeline is to be built in three phases. The 1,300-km first phase will link Atasu in Kazakhstan to Alashankou in northwest China. It will deliver 10 million tonnes of oil to China initially, doubling to 20 million tonnes in the second phase. In the first phase, crude from the pipeline will feed PetroChina's refinery in Dushanzi, Xinjiang province. PetroChina plans to boost the refining capacity at the plant to 10 million tonnes per year from the current six million. It is also mulling building a finished-products pipeline, connecting Dushanzi to Lanzhou in Gansu province in the central part of the country, which will be able to carry up to 10 million tonnes of oil products annually. This pipeline will connect with several others in the country, feeding the oil-consuming regions in the east. But that plan is contingent on oil supply from the second phase of the China-Kazakhstan pipeline and increased production from Xinjiang oil fields, according to a PetroChina source. The mainland is not willing to advance the plan if there is insufficient crude supply from Kazakhstan, he said. The Dushanzi-Lanzhou oil project will link existing oil pipelines in central regions to petrochemical enterprises in eastern and southwestern China, forming a massive west-to-east artery. This will fulfill China's ambition to use Xinjiang as an energy base to supply the booming east. But if there is insufficient oil supply from Kazakhstan, the project may not be economically viable. ``The volume of crude oil that Kazakhstan can supply us in the second phase of the China-Kazakhstan pipeline will determine whether we will build this finished-products pipeline,'' said the source. Due to the uncertainty over the oil volumes, PetroChina has only spent US$190 million on the 270-km section in the mainland. The cost for the first phase is US$1.71 billion, said the PetroChina source said. Kazakh oil will also have to compete with crude shipped from the Middle East and refined in the major oil-consuming eastern provinces. ``The Chinese would also lose the bargaining power for the price of Kazakh crude if they go ahead and build the finished-products pipeline without securing enough oil supply,'' said Victor Shum, a consultant with Pervin & Gertz. ``China provides an important market for Kazakhstan to expand its oil exports. But since there is uncertainty on how much oil Kazakhstan can supply, there is no guarantee that China will build the finished-products pipeline from Xinjiang.'' The China-Kazakhstan project was revived last year, partly as high oil prices made it attractive to the Kazakhs, but largely because of Moscow's lukewarm attitude on which route to use to transport Siberian oil to Asia. With reserves at the mainland's largest oil-producing region in Daqing being depleted, China is looking to the west for energy. Crude from Kazakhstan, which neighbors western Xinjiang, would aid this strategy. China plans to more than double its Xinjiang output to 50 million tonnes by 2010, from 22 million tonnes last year, according to China Daily. But the complex geology makes it difficult to explore for oil because deeper drilling is involved. Meanwhile, the mainland sources more than 60 percent of its crude from the Middle East and its oil import dependency is expected to rise to 50 percent of total consumption by 2007 from 30 percent.

03.07.2005 Government of Kazakhstan considers “Shell” to be one of the most important partners in oil and gas sector: http://www.inform.kz
ASTANA. July 1. KAZINFORM. Today PM of Kazakhstan Daniyal Akhmetov has met executive director of the largest energy and petrochemical concern “Shell” Jeroen van der Veer, PM’s press service informs. In the course of the talks considered was a number of issues concerning further development of “Shell” activity in Kazakhstan, progress and prospects of realization of joint projects in development of hydrocarbon deposits. “Shell” participates in three Kazakhstan undertakings infusing above USD 2 billion into the economics. PM expressed satisfaction with dynamics of cooperation noting that the Government of Kazakhstan considers “Shell” to be one of the most important partners and investors in sphere of oil and gas sector development. In turn, Jeroen van der Veer stressed that “Shell” consortium seeks to become long-term investor and expects to further cooperation and extension of its presence in Kazakhstan.

new | july 2005 | november 2004 | october 2004 | september 2004 | august 2004