Kazakhstan To Retain Majority Ownership Of Pipelines

August 2012, Vol. 239 No. 8

Kazakhstan’s Legislature has passed a bill requiring any new trunk oil or gas pipelines built on the territory of the Central Asian state be majority-owned by the state. The legislation will mean that the state will have at least 51% in any new pipelines.

Kazakhstan’s trunk pipelines are mainly controlled by the relevant transport subsidiaries of Kazmunaigaz, the state oil and gas firm, with the notable exception of the Caspian Pipeline Consortium’s Tengiz-Novorossiisk oil pipeline, which is controlled by an international consortium in which Kazakhstan has a minority equity stake.

Kazakhstan will have legal status to back up its intention to hold majority control of the proposed 750-km Yeskene-Kuryk oil pipeline, which is to serve as part of the Kazakhstan Caspian Transport System (KCTS) to carry oil from the Kashagan field to a port on the Caspian Sea coast. The pipeline is expected to have an initial throughput capacity of 460,000 bpd, rising to as much as 1.12 million bpd.