Kazakhstan’s Caspian Pipeline Oil Exports On Schedule

Kazakhstan’s oil exports via its main oil export route, the Caspian Pipeline Consortium (CPC), remain on schedule despite recent damages to the pipeline, the country’s energy minister announced on Wednesday. Russia’s Kropotkinskaya pumping station in southern Krasnodar region was hit by a Ukrainian drone attack on February 17.

“So far there is no risk of a decrease in tanker loading volumes,” Energy Minister Almasadam Satkaliyev told reporters that there were no restrictions on oil intake, adding that oil storage is large enough for stable operations.

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Kazakhstan oil output has surged to a record high despite damage to the CPC. Kazakhstan’s oil and gas condensate production clocked in at 2.12 million barrels per day (bpd) on February 19, the sources said, citing official data. Russia reported this week that CPC capacity was cut 30-40% after an attack by Ukrainian drones.

It’s not clear how Kazakhstan has managed to ramp up output despite having constrained export capacity. ?azakhstan relies on CPC for more than 80% of its exports. The surge in output follows a rise in production at the giant Tengiz oilfield, operated by Tengizchevroil, led by Chevron Corp. (NYSE:CVX), which has embarked on a $48 billion expansion of Tengiz.

Last month, Reuters reported that Kazakhstan could sharply increase its crude oil exports out of Turkey’s port of Ceyhan, and dramatically reduce the more than 80% share of flows it currently sends via Russia. According to Kazakhstan Energy Minister Almasadam Satkaliyev, exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline could increase to 20 million metric tons a year from the current 1.5 million as the country increases oil production.

The risk of disruptions to Russian oil flows remains high with Ukraine increasing the intensity of drone attacks on Russian energy infrastructure. Ukrainian drones have hit a major sea port in southern Russia as well as Rosneft PJSC’s Tuapse oil refinery, potentially affecting fuel exports. The Tuapse port on the Black Sea and a refinery were the targets of the overnight attack on Tuesday, a Ukrainian law enforcement official has revealed.

By Alex Kimani for Oilprice.com

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