Kazakh Government Discusses Measures to Address CPC Terminal Month-Long Shutdown

NUR-SULTAN – The Kazakh government convened for an urgent meeting on Wednesday to discuss the response to the shut down of a Novorossiysk oil terminal on the Caspian Pipeline, critical for Kazakh oil exports, for 30 days, reports the government’s press service.

Smailov and senior government officials meet on Wednesday. Photo credit: prime minister.kz

The meeting discussed steps to “minimize the negative consequences and losses to the state budget due to restrictions on exports of Kazakhstan’s oil.”

The Kazakh Ministry of Energy announced on July 7, however, that the exports of Kazakh oil continue as usual.  

The ruling by the Primorsky District Court in the southern Russian city of Novorossiysk suspended the operation of the terminal for 30 days, according to a CPC (Caspian Pipeline Consortium) statement. It says the audit conducted at CPC-R revealed a “number of documentary violations under the oil spill response plan.” The consortium was instructed to eliminate violations by Nov. 30, 2022, however, Rostransnadzor, a Russian agency overseeing the transport network, including pipelines, appealed to the court with the intention to suspend activities for 90 days. 

The Novorossiysk terminal is crucial for Kazakh oil exports shipping more than two-thirds of Kazakh oil to the markets of Europe via Russia. 

Diversification of oil export routes through the Caspian Sea is a priority for Kazakhstan, said President Kassym-Jomart Tokayev at the July 7 meeting on the transport and transit potential. 

“The Trans-Caspian route is a priority. I instruct KazMunayGas [national oil and gas company] to work out the best option for its implementation, including the possibility of attracting investors to the Tengiz project. The government and Samruk Kazyna should take measures to increase the capacity of the Atyrau-Kenkiyak and Kenkiyak-Kumkol oil pipelines,” said the President.

In 2021, Kazakhstan’s oil production reached 85.9 million tons and oil exports reached 67.6 million tons. Besides the CPC, Kazakhstan exports its oil via the Atyrau-Samara pipeline, the Atasu-Alashankou pipeline, and the Aktau seaport and railroad.

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