Russian oil transportation company Rosneft plans to help finance its share in the Caspian Pipeline Consortium (CPC) through a joint venture with Shell Exploration BV.
Rosneft will hold 51% and Shell 49% of the Russian firm's 7.5% interest in the crude oil line, expected to start up in mid-1998 at the earliest.
Shell said the original CPC agreement between the governments of Russia, Kazakhstan, and Oman had to be restructured to incorporate western companies as a source of finance.
A restructuring protocol signed in April involved, besides Rosneft, shareholders Chevron Corp. 15%, Mobil Corp. 7.5%, British Gas plc 2%, Agip SpA 2%, Munaigaz 1.75%, Lukoil 12.5%, the Russian government 24%, Kazakh government 19%, Omani government 7%, and Oryx Energy Co. 1.75%.
The agreement will once again be restructured to include Shell, after which a detailed execution plan will be drawn up to include project financing.
The first phase of the pipeline will move crude oil from Tikhoretsk in western Kazakhstan southwest to the Black Sea port of Novorossiysk (OGJ, Sept. 4, 1995, p. 111).
First phase construction, expected to cost $350-400 million, will enable transportation of as much as 300,000 b/d of oil from the Volga-Urals region, western Siberia, western Kazakhstan, and parts of Azerbaijan.
A second phase is to boost system capacity to 1.24-1.5 million b/d, and incorporate a new pipeline from Russia. This will link up with an existing pipeline to allow an increase in Kazakhstan's Tengiz field exports.
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