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Kazakhstani pipeline begins to flow

"When I first began to talk about it in 1997, everybody said it was utopia. But Kazakhstan turns utopia into reality."

Nursultan Nazarbayev, Kazakhstani president

Kazakhstani President Nursultan Nazarbayev yesterday ceremonially opened the taps in a new pipeline carrying oil from one of the region's greatest energy powers to one of its hungriest consumers, China.

The oil-rich former Soviet republic's first pipeline bypassing Russia began to fill with oil as Nazarbayev pushed a button at the headquarters of the national KazMunaiGaz company in the capital, Astana.

"It will work for the good of our two peoples," Nazarbayev said.

The 1,000km pipeline designed to carry 140 million barrels of oil a year opens a huge market for the Central Asian nation, which is expected to become one of the world's top oil exporters.

For China, the new route is a key step toward securing adequate foreign energy supplies for its booming economy.

The pipeline is a 50-50 joint venture between state companies China National Petroleum Corp (CNPC) and KazMunaiGaz.

"When I first began to talk about it in 1997, everybody said it was utopia. But Kazakhstan turns utopia into reality," Nazarbayev said, while the monitors showed pressure increasing as oil began to enter the pipeline that starts in the central town of Atasu, 280km south of Astana.

Kazakhstan, which has the largest oil deposits in the energy-rich Caspian Sea, currently produces about 1.3 million barrels a day, and by 2015 it will increase production to 3 million barrels a day, according to the Oil Ministry.

Until now, the main route for Kazakh oil exports has been the Caspian Pipeline, which was launched back in 2001 to join the giant western Tengiz oil field with the Russian Black Sea port of Novorossiisk.

For Beijing, the launch of the new pipeline that runs to the Altaw Pass in northwestern China is part of a strategy aimed at satisfying its growing appetite for energy by tapping the oil reserves of its neighboring Central Asian nations.

The Kazakh-Chinese pipeline will initially carry oil from the Kumkol field in central Kazakhstan, which is being worked by CNPC following its acquisition of the field's operator earlier this year.

By 2011, when it reaches full capacity, the pipeline is expected to be used to ship oil from Russia's western Siberia.
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