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Astana, Kazakhstan • 08 July 2022

CPC Operations Suspended for 30 Days by Russian Court Order

Kazakhstan considers measures to minimize the losses on Caspian Pipeline Consortium issue

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cpc.ru
cpc.ru

A Russian court has ordered the Caspian Pipeline Consortium (CPC), which carries oil from Kazakhstan to the Black Sea, to shut down its crude terminal for 30 days, QazMonitor reports referring to The Times of Central Asia

The July 6 ruling cited issues related to the handling of oil spills and ordered the consortium, which supplies 1% of global oil, to abide by the decision. 

In a statement posted on its website, the CPC added that it planned to appeal against the decision.

"The Caspian Pipeline Consortium acts within the legal framework of the Russian Federation and is forced to execute the court ruling. The ruling will be appealed in accordance with the procedure established by law."

CPC

Some 80% of Kazakhstan's oil exports flow through the terminal in Russia's southern port city of Novorossiysk. The terminal can transport 67 million tons of oil annually.

The United States has imposed sanctions on Russian oil over the Kremlin's war on Ukraine but has said flows from Kazakhstan through Russia should run uninterrupted.

The CPC said on July 6 that Russian Deputy Prime Minister Viktoria Abramchenko ordered regulators, including industrial safety regulator Rostekhnadzor, to inspect the facilities of the Russian part of the consortium.

It said that the inspection had found some "documentary" irregularities in plans on how to tackle oil spills. An oil spill occurred at the terminal last year.

An inspection by Russian authorities found that documentation for emergency plans to deal with oil spills was incomplete, the CPC said.

The authorities originally gave the CPC until November 30 to correct the violations, but the regional transport regulator unexpectedly demanded the terminal's closure on July 6, which the court approved.

The court said the stoppage was necessary to prevent possible environmental damage, Interfax reported late on July 5.

primeminister.kz
primeminister.kz

On July 6, the prime minister of Kazakhstan Alikhan Smailov held a government meeting for considering measures to take on the issue of suspension of the operations of the Caspian Pipeline Consortium.

During the meeting, the necessary measures to minimize the negative consequences and losses of the state budget in connection with restrictions on the export of Kazakh oil were discussed, the prime minister’s website reported.

The shareholders of the CPC are Russian Federation (24% managed by Transneft, 7% on the balance sheet) - 31%, Kazakhstan (represented by KazMunaiGaz - 19% and Kazakhstan Pipeline Ventures LLC - 1.75%) - 20.75%, Chevron Caspian Pipeline Consortium Company - 15%, LUKARCO B.V. - 12.5%, Mobil Caspian Pipeline Company - 7.5%, Rosneft-Shell Caspian Ventures Limited - 7.5%, BG Overseas Holding Limited - 2%, Eni International N.A. N.V. - 2% and Oryx Caspian Pipeline LLC - 1.75%.

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