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Jul. 2 – The extension of the major oil pipeline from China’s Xinjiang Uighur Autonomous Region to central Kazakhstan and now the Caspian Sea has passed initial tests.
The Kenkiyak-Kumkol pipeline will give China access to more of its Central Asian neighbor’s oil resources in its western regions which begins at the Kenkiyak field managed by the China National Petroleum Corp (CNPC).
China has been active in engaging its Central Asian neighbors through the Shanghai Cooperation Organization that gives it the opportunity to wield influence over the region’s cash-poor but energy-rich member countries through military exchanges and loans.
In April, China and Kazakhstan agreed to a “loan-for-oil” deal worth US$10 billion that allows CNPC to buy stakes of the company MangistauMunaigas. The purchase is strategic because the Kazakh company owns the fields nearby the extended oil pipeline. Chinese oil companies have been buying shares in Kazakh oil producers, including CNPC-AktobeMunaiGaz, operator of Kenkiyak and Zhanazhol fields and PetroKazakhstan.
“The implementation of this project will have tremendous influence on the whole oil and gas industry, providing new opportunities for oil exports,” the Kazakh company handling the pipeline extension, KazStroyService, told Reuters.
Beijing’s goal is to have up to 40 billion cubic meters of Central Asian gas imported to the mainland annually beginning from Turkmenistan then through Kazakhstan and Uzbekistan.
