CDB provides $896 million loan for Kazakhstan-China Pipeline Project (Linked to Record ID#54527 and #54524)

Project narrative

On July 6, 2004, JSC KazTransOil (KTO) — a state-owned oil pipeline operator in Kazakhstan — and China National Oil and Gas Exploration and Development Corporation (CNODC) created a special purpose vehicle called Kazakhstan-China Pipeline LLP (KCP or Қазақстан-Қытай Құбыры ЖШС or 中哈管道有限责任公司). KCP, which is jointly owned by KTO (50% equity stake) and CNODC (50% equity stake), was created to construct and operate the Atasu-Alashankou pipeline and the Kenkiyak-Kumkol pipeline. These pipelines are two of three pipeline systems of the Kazakhstan-China Pipeline network, which was built to create a transport corridor for the export of Kazakhstani oil to China. ICBC financed the Atasu-Alashankou Section of Kazakhstan-China Oil Pipeline Project (as captured via Record ID#54527) and the Kenkiyak-Kumkol Section of the Kazakhstan-China Oil Pipeline Project (as captured via Record ID#54524). However, KCP also signed a $896 million facility (loan) agreement with China Development Bank (CDB). The timing and purpose of the CDB loan agreement agreement is unknown. However, it likely supported the “second stage” of the Kazakhstan-China Oil Pipeline Project. The Atasu-Alshankou Section of the Kazakhstan-China Oil Pipeline Project was initiated on September 28, 2004 and completed December 15, 2005. The Kenkiyak-Kumkol Section of the Kazakhstan-China Oil Pipeline Project was initiated on December 11, 2007 and completed on October 6, 2009. The “second stage” of the Kazakhstan-China Oil Pipeline Project was initiated in 2012 and completed in 2018. It involved (a) reversing the oil pumping direction, (b) installing four additional pumping stations along the Atyrau-Kenkiyak section of the pipeline and three additional pumping stations along the Kenkiyak-Kumkol section of the pipeline, (c) increasing the capacity of the Kumkol-Karakoin section and the Karakoin-Atasu section of the pipeline, and (d) increasing the capacity of the Atasu-Alashankou section of the pipeline from 10 to 20 million tons per year. In 2012, implementation of the “second stage” of the Kazakhstan-China Oil Pipeline Project commenced. Then, in 2012, the capacity of the Atasu-Alashankou section of the oil pipeline was expanded from from 10 to 20 million tons per year — through the construction of pump station №8 and pump station №10 by KCP. In 2014, the Kumkol-Dzhumagaliyeva section of the oil pipeline, 199 km long, 800 mm in diameter was put into operation, the purpose of which was to increase the reliability and the capacity of the section of up to 25 MMT/y. In 2014 and 2015, pipes with a diameter of 800 mm at the exit of the OPS n.a. B. Dzhumagaliev (18 km) and at the exit of the OPS «Barsengir» (19 km) were replaced in order to increase the reliability of the Dzhumagaliyev-Atasu section of the Pavlodar-Shymkent pipeline (taking into account the growth in oil transportation volumes). In 2016, the reconstructed OPS n.a. N.Shmanov was commissioned. Its capacity expansion made it possible to supply the Mangyshlak oil coming from the Uzen-Atyrau section of the pipeline to the Atyrau Refinery. In 2018, together with the launch of the reconstructed HOPS Kenkiyak, KazTransOil JSC completed its participation in the second stage of the Kazakhstan-China Project.