One of China's major state oil companies has decided to postpone its plan to build a pipeline to move crude oil from Kazakhstan to northwestern China, citing insufficient reserves in Kazakh- stan's Uzen and Aktyunbinsk oil fields to justify the pipeline's construction.
The projected commercial crude oil production from these fields avalable for the pipeline is estimated at less than 7.6 million metric tons/year (152,000 b/d), far below the pipeline design capacity of 25 million tons/ year (500,000 b/d).
China National Petroleum Corp., the sole investor and prospective operator of the pipeline, has informed its Kazakh counterpart of the project's economic infeasibility.
The original plan called for CNPC to invest $2.4 billion over 7 years beginning in 1998 to build the 3,277-km pipeline to link Uzen and Aktyubinsk fields, and possibly Tengiz oil field, in Kazakhstan with China 's Xinjiang Uygur autonomous region (OGJ, June 7, 1999, p. 21). If the plan were to proceed, CNPC would have assumed all the risks involved. China agreed in 1997 to invest $4.3 billion to develop part of the crude reserves of Uzen and Aktyubinsk fields over 20 years.
As for supergiant Tengiz oil field, under development by a unit of Chevron Corp. and whose production is currently dedicated to another pipeline megaproject headed west, it was unclear how that field would figure into CNPC's plans for the Kazakh-stan-China pipeline.
Kazakhstan decided this month to sell nearly half its stake in Tengiz oil field to raise funds to fill an estimated $560 million budget gap for 1999. The Kazak government estimates its stake in the field at $1.2-1.6 billion.
