Caspian Pipeline Consortium

CPC was initially created in 1992 as a development by the Russian, Kazakhstani and Omani governments to build a dedicated pipeline from Kazakhstan to export routes in the Black Sea. Chevron Corporation was asked to join, however talks broke down due to the high financial burden Chevron would have to take on relative to equity in the pipeline. Progress on the project stalled for several years until 1996 when a restructure included eight production companies in the project. Among the companies were Chevron, Mobil, LUKoil, Royal Dutch Shell and Rosneft. BP joined the consortium in 2003. Shares were divided fifty-fifty between the three states and the eight companies. Production companies financed the construction cost of US$2.67 billion, while the Russian Federation contributed unused pipeline assets worth US$293 million.[1][2]

In April 2007, the Russian government transferred its shares to the Russian state-owned oil pipeline company Transneft.[3] In October 2008, the Government of Oman sold its 7%-stake to Transneft at a price of $700million and withdrew from the project.[4] On 17 December 2008, a memorandum on expanding the pipeline was signed.[5]

On October 14, 2016, the crude oil from Kashagan oil field in Kazakhstan has started coming into the Caspian Pipeline Consortium’s system.[6]

On April 18, 2018, the last Pump Station of CPC Expansion Project - PS-2 in Kalmykia - was put into permanent operation.[7]

On May 21, 2019, the annual meeting of CPC shareholders adopted the Bottleneck Elimination Program (BEP), which provides for expansion of the Tengiz - Novorossiysk oil pipeline capacity to at least 72,5 million tons per year.[8]

The diameter of the 1,510 kilometres (940 mi) long oil pipeline varies between 1,016 millimetres (40.0 in) and 1,067 millimetres (42.0 in). There are five pumping stations. The marine terminal includes two single point moorings and the tank farm consists of four steel storage tanks of 100,000 cubic metres (3,500,000 cu ft) each. Pipeline throughflow started at 350,000 barrels per day (56,000 m³/d) and has since increased to 700,000 barrels per day (110,000 m³/d).[2][9]

The second stage reached a capacity of 1.4 million barrels per day (220,000 m³/d).[10] As of 2022, the pipeline throughput was abount 1.2 million barrels per day (190,000 m³/d), about 1.2% of global oil demand.[11]

In 2008, CPC transported 31.5 million tons of crude, down from 32.6 million tonnes in 2007. In the first three months of 2009, the pipeline transported 8.7 million tonnes of oil.[12]

From 2001 to April 31, 2020 through the Tengiz-Novorossiysk pipeline system 662,784,671 tons of net oil were delivered to world markets. Of this amount, 582 814 809 tons is oil from Kazakhstan and 85 295 642 tons is oil produced in Russia. The total number of tankers processed during this period was 287.[13]

In March 2022, two of the three pipeline connected ship berths at the Port of Novorossiysk suffered storm damage. Repairs may take two months, with exports falling by up to 1 million barrels per day.[11]

The Caspian Pipeline Consortium was initially registered in the Bermuda Islands in 1992.[1] It is split into two companies: CPC-R operates the Russian section of the pipeline and CPC-K operates the Kazakh section.[1]

The shareholders of the consortium are:

• Transneft - 24%
• KazMunaiGaz - 19%
• Chevron Caspian Pipeline Consortium Co. - 15%
• LukArco B.V. - 12.5%
• Mobil Caspian Pipeline Co. - 7.5%
• Rosneft - Shell Caspian Ventures Ltd. - 7.5%
• CPC Company - 7%
• BG Overseas Holdings Ltd. - 2%
• Eni International (N.A.) N.V. S.ar.l - 2%
• Kazakhstan Pipeline Ventures LLC - 1.75%
• Oryx Caspian Pipeline LLC - 1.75%

• Caspian Pipeline Consortium, official website
• New York Times map of pipeline route