Kazakhstan expands gas capacity to
China By Vladimir Socor
The longest section of the
Turkmenistan-Uzbekistan-Kazakhstan-China transit
pipeline passes through Kazakhstan's territory: it
measures 1,115 kilometers in length, of the total
1,830-kilometer Turkmenistan-China distance.
Kazakhstan is adding a dedicated export pipeline
for its own gas exports to China. In combination,
these developments (alongside planned oil exports)
confer to Kazakhstan a major role in China's
energy security calculations.
Kazakhstan
is currently transiting Turkmenistani gas to China
at an annual rate that should approach 30 billion
cubic meters (bcm) by December 2012 (ie, set for
the full calendar year 2013), plus small volumes
of Uzbekistan's gas in transit. The transit
pipeline is planned to reach full operating
capacity through the parallel Lines A, B and C at
65 bcm per year by December 2015
(presumably from the
calendar year 2016 onward).
On August 6,
2012, the project company Asian Gas Pipeline
announced that it has completed the construction
of Lines A and B of the transit pipeline on
Kazakhstan's territory. The installation of
compressors is planned to be completed by the end
of 2012. A further round of capacity expansion is
planned with construction of Line C, in the same
corridor across Kazakhstan's south.
The
project company, Asian Gas Pipeline, is a parity
joint venture of China's Trans-Asia Gas Pipeline
and Kazakhstan's Kaztransgaz (fully-owned
subsidiaries of China's National Petroleum
Corporation and Kazakhstan's national holding
KazMunaiGaz, respectively). The joint company was
established in November 2007 to build and operate
this pipeline. Construction work on Kazakhstan's
territory started in July 2008. Lines A and B had
commenced below-capacity operations already in
December 2009 and December 2010, respectively.
The pipeline's capacity on Kazakhstan's
territory is dedicated almost entirely to the
transit of gas from Turkmenistan, with small
inputs from Uzbekistan and Kazakhstan itself. In
September 2011, CNPC and KazMunaiGaz signed the
framework agreement on the design, financing,
construction, and operation of Line C of the
Turkmenistan-China transit pipeline on
Kazakhstan's territory.
Astana and Beijing
support an additional pipeline, dedicated to
Kazakhstan's own gas exports to China (as distinct
from the Kazakhstan section of the
Turkmenistan-China transit pipeline). In June
2010, KazmunaiGaz's and CNPC's subsidiaries,
KazTransGas and Central Asia Gas Pipeline, signed
an agreement to build the Beyneu-Shymkent pipeline
as a parity joint venture. Originating in the
Mangistau region on Kazakhstan's Caspian coast,
this line connects with the pipeline bound for
China, at a junction point near Shymkent in
Kazakhstan's south.
The Beyneu-Shymkent
line is planned to be sourced from Karachaganak,
Tengiz, and potentially Kashagan, thus relying in
part on the capture of associated gas at those oil
fields. The pipeline joint venture has started
construction work on the line's two sections in
December 2010 and September 2011, respectively,
budgeting $1 billion and planning to borrow nearly
$3 billion for this project.
The
1,475-kilometer pipeline route is longer than
Kazakhstan's section of the Turkmenistan-China
transit pipeline. The Beyneu-Shymkent line is
expected to go into operation in two phases, with
a capacity of 10 to 15 bcm per year when both
phases are completed by 2013 and 2015,
respectively.
Gas volumes flowing from the
Caspian basin eastward in the years immediately
ahead may leave little or no volumes available for
a possible trans-Caspian pipeline westward. After
Russia, China is now asserting its own priority
claims more effectively, to larger-volume gas
supplies from Kazakhstan.
Barring some
unforeseen, major gas discoveries on Kazakhstan's
Caspian coast or its offshore, the planned
trans-Caspian pipeline will apparently have to be
sourced entirely from Turkmenistan's vast
reserves.
Fast-paced construction of Lines
A and B of the transit pipeline to China is a
performance that Line C, as well as the
Beyneu-Shymkent pipeline, look set to emulate.
Successful implementation of such tight
construction schedules, on projects of this
magnitude, seems to presage on-schedule completion
of Kazakhstan's entire export pipeline system in
China's direction, to the full planned capacity at
a similarly fast pace.
Vladimir
Socor is a Senior Fellow of the
Washington-based Jamestown Foundation and its
flagship publication, Eurasia Daily Monitor, and
is an internationally recognized expert on the
former Soviet-ruled countries in Eastern Europe,
the South Caucasus and Central Asia. Socor is a
regular guest lecturer at the NATO Defense College
and at Harvard University’s National Security
Program’s Black Sea Program. He is a Romanian-born
citizen of the United States based in Munich,
Germany.
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