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Kazakhstan Gets $1.8 bln in Chinese Funding for Gas Pipeline

Thursday 13 December 2012

ALMATY – China’s state-owned China Development Bank (CDB) will provide a US $1.8 bln loan to finance a gas pipeline project in Kazakhstan, the KazTransGas company said Thursday. The loan will be allocated to Beineu-Shymkent Gas Pipeline LLP.

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New domestic gas pipeline will enable Kazakhstan to launch gas export to China and to install gas in the south of the country as well.
(Map: courtesy of petroleumjournal.kz)
The first ever new domestic gas pipeline built in the years of Kazakhstan’s independence will contribute to finding solution to two problems: 100% provision of the south of the country with the Kazakhstan-produced gas and gas installation in 577 residential areas in Kyzylorda, South Kazakhstan, Zhambyl and Almaty regions including Baikonur. There is another long-run objective in the last phase of the construction works the gas pipeline will join the Kazakhstan-China global export pipeline system.

Beineu-Shymkent Gas Pipeline LLP is a “Project oriented Company” for the construction of the 2nd section of Kazakhstan-China gas pipeline. It is controlled 50-50 by KazTransGas and the China National Petroleum Corporation (CNPC). The two companies agreed on plans for its construction in 2008 and have invested $500 mln each in the joint venture. The project target is to connect all major Kazakh pipelines into a single network and transport gas from fields of western regions to population in south region to provide energy independence of the country. Its total cost is estimated at $3.6 bln.

The 1475 km project will be built in two phases; the first involves laying 1,164 km from Bozoy-Shymkent and constructing a compressor station near Bozoy. This phase, providing a capacity of 5 bln m³ is set for completion in October 2013. Second-phase activity, to be completed from 2014-15, includes a 310 km section from Beineu–Bozoy and a compressor station in Karaozek. Another 26 branches will be built from the mainline during the first and second phases to supply communities along the route. The completion of the 2nd phase will boost the capacity of the pipline to 10 bln m³.

On August 1, 2012 Beineu-Shymkent Gas Pipeline LLP initiated full-scale installation of Beineu-BozoyShymkent main gas pipeline to link the gas-bearing regions in Western Kazakhstan to energy resource-hungry South Kazakhstan that imports gas from Uzbekistan. Gas supply from Uzbekistan is unstable: as air temperature sinks below zero in winter in the neighbouring country Uzbekistan practices slump of gas supply to Kazakhstan. Even the current supplies are not adequate to meet the needs of industry for instance, shortage of energy resources prevents the fertilizer plant based in Merke, Zhambyl region from reaching the planned production capacity.

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