TRANSPORTATION
OF HYDROCARBON FROM KAZAKHSTAN TO CHINA
D.S. Smagulova, Master of Laws, Senior Lecturer, Department of
Customs,
financial
and environmental law, Al-Farabi University, the Republic of Kazakhstan
e-mail: smgdana@mail.ru
Y. O. Utepov, second degree student, Al-Farabi University, the
republic of Kazakhstan
e-mail: erdaulet_kktl@mail.ru
Annotation
Currently China's economy is growing
rapidly. In the context of such a development of its own hydrocarbon resources,
China becomes insufficient to ensure the needs of the domestic market. In
accordance with the economic growth, China has become increasingly focused on
Kazakhstan's oil.
Ratio of oil in the energy balance
of the PRC is at least 30%. China is in a tough dependence on oil imports. In
the medium term, this dependence is likely to increase. Thus, according to the
Ministry of Natural Resources of the PRC in 2013, China has extracted 189
million tons of oil, and imported - 199 million tons. The State Committee for
National Development and Reform Commission estimated that in 2020 China's need
for oil will account for about 560-600 million tons, China's dependence on
external supplies of "black gold" will not be less than 65%. This
means that in 2020 China will need to import at least 365-390 million tons of
oil. [1]
Key words: Oil pipeline, oil and gas industry, import, export, capacity
China was already interested in the
oil and gas industry of Central Asia in the mid 90-ies of the last century.
Since then, the region's importance in China's energy, as well as overall
economic policy, has progressively increased.
It should be noted that the interest
is not one-sided. Kazakhstan, in turn, is also interested in expanding its
areas of oil supplies. Kazakhstan has always held the position of multi-vector
in international relations. This also applies to relations in transportation of
hydrocarbons, in connection with which Kazakhstan is not limited only to the
direction of oil supplies to Russia, given the clear prospect of the economy of
China.
In 1997, negotiations between China
and Kazakhstan, which resulted in the form of a written agreement on the
construction of Kazakhstan-China oil pipeline, which stretched 3,200 km and had
a capacity of up to 20 million tons per year estimated at $ 3-3.5 billion. The
starting point of planned oil pipeline was Atyrau, endpoint town - Alashankou.
Despite the fact that the agreement
was reached in 1997, there was no progress, as oil prices fell during that
period. Chinese side was obligated to finance the project, that is why the
question of the inadvisability of the whole project still remained.
Already in June 2003, a second
attempt to establish transportation of hydrocarbons from Kazakhstan to China
was made. At the time China National Petroleum Corporation signed an agreement
with the Kazakh government on the construction of Kazakhstan-China oil pipeline
Atasu-Alashankou. The agreement was more productive and in May 2006 the first
Kazakhstan-China pipeline, which was able to transport about 20 million tons of
oil per year, was launched. The first oil pipeline, oriented east to China, was
of particular importance for Kazakhstan, as it allowed Kazakhstan to enter the
huge, and the promising Chinese market. This direction allowed Kazakhstan to be
less dependent on Russia.
For the usage of the pipeline by
both sides, a joint company "Kazakhstan-China pipeline" controlled by
national oil companies of China and Kazakhstan was set up. [2] In addition to
the construction of oil pipeline between two countries an agreement on the
joint construction of the pipeline was reached.
We can say that the president of
Kazakhstan was able to reduce country's dependence of Russian companies,
however, other negotiations in Astana are in process so as to transport oil in
other directions, for example, Iran and Azerbaijan. [3]
To date, the level of the Chinese
presence in Kazakhstan's oil and gas industry is much higher than the Russian.
So, at the end of 2013, Chinese companies (mostly CNPC / CNPC) extracted about
15 million tons of oil in Kazakhstan. This is about 21% of total oil production
in the country and almost 2.5 times more than the Russian extraction. Following
the acquisition of certain assets in Kazakhstan in the oil and gas industry in
2009, Chinese companies reached the production of 18 million tons of oil (about
23% of total oil production in the country). In comparison, at the end of 2013,
Russian companies ("LUKOIL ") extracted about 6.4 million tons of
oil, accounting for about 8.3% of total production (just over 7.6 million
tons). [4]
Oil is exported to China on the
pipeline "Atasu - Alashankou", but there is a problem with filling
the pipeline. In 2009 the volume of export of Kazakh oil to China was
approximately 6.2 million tons, while the capacity of the pipeline "Atasu - Alashankou" is about 10 million
tons per year. In this case, Kazakhstan itself is not able to guarantee the
delivery of a given amount of oil. In particular, in the period of 2012-2013,
Russian oil was pumped through the pipeline "Atasu - Alashankou" as
well. As a result, modern possibilities of Kazakhstan for export of oil to
China (excluding the so-called "big oil" from offshore Kazakh section
of the Caspian Sea, which is expected after 2012) are in the range of 6-8
million tons per year. This is about 3% of China's oil imports in 2009 and is
about 1.8% of the estimated total Chinese oil imports in 2020. [5]
In general, the commission of the
pipeline "Atasu-Alashankou" became one of the most important events
in 2006, it is a significant step in the implementation strategy of
multi-vector systems of transportation of oil. Oil companies have provided a
reliable and cost-effective direction of oil supplies to the promising and
fast-growing Chinese market.
In addition to this, the pipeline
also allows to use of the transit potential of Kazakhstan to transport Russian
oil to China.
This project was implemented by LLP
"Kazakhstan-China Pipeline" - a joint venture on a parity basis (with
stakes of 50%) of JSC "KazTransOil" and CNODC, a subsidiary of China
national company CNPC.
In order to ensure reliable and
uninterrupted reception and transportation of oil through the "Atasu -
Alashankou" JSC "KazTransOil" has conducted a number of
activities for the modernization and reconstruction of the Eastern branch of
the section "Priirtyshsk - Atasu," "Karakoin - Atasu" and
directly by the MOPS. "Atasu" is the head pumping station of the
pipeline" Atasu-Alashankou ".
By pipeline
"Atasu-Alashankou", oil comes from the oil fields of Central
Kazakhstan to China. Also it is possible to supply oil from western regions of
Kazakhstan, that is why a discharge jetty was built in Atasu for receiving oil
from railway tanks and then handle it
to the pipeline "Atasu-Alashankou".
Kazakhstan-China partnership is not
finished yet. In December 20, 2010 between the Kazakh company
"KazTransGas" and the Chinese company «Trans-Asia Gas Pipeline Co
Ltd» was signed a memorandum of association for the establishment a
"pipeline" Beineu-Shymkent" with a limited liability. The main
purpose of the project is to provide security and reliability of gas supply to
the southern regions of the country, through the supply of Kazakh gas from
western regions.
Funding for the project will come
from the authorized capital of $ 1 billion, formed by deposits of $ 500 million
from Kazakhstan and China, and debt financing of $ 3 billion. Formation of the
Kazakh part of the authorized capital of the new company will be carried out
from the national budget.
The length of this pipeline is 1,475
kilometers, the route runs through the territory of Mangistau, Aktobe,
Kyzylorda and South Kazakhstan regions. To ensure Zhambyl and Almaty regions
pipeline will be connected to the existing gas pipeline "Bukhara
gas-bearing region - Tashkent-Bishkek-Almaty" and the first section of the
pipeline "Kazakhstan-China".
Construction of the pipeline is
planned in two phases: the first phase (2011-2012 years) - Construction of the
linear part of the plot "Bozoi-Shymkent" (1164 kilometers) and a
compressor station near the village Bozoi (Aktobe region). In the second stage
(tentatively in 2014-2015) the linear part of the plot "Beyneu-Bozoi"
(311 kilometers) and compressor station near the village of Karaozek (Kyzylorda
region) will be constructed.
The project
"Beyneu-Bozoi-Shymkent" involves the construction of 26 outlets,
through which gas will be supplied to the settlements along the pipeline route.
During the construction period 3,5 thousand specialists in various fields will
be involved, after the commissioning of the first phase in 2013, 500 permanent jobs
will be created.
The project
"Beyneu-Bozoi-Shymkent" is implemented in accordance with the
agreement between the Governments of Kazakhstan and China on cooperation in the
construction and operation of the gas pipeline Kazakhstan-China on August 18,
2007, amended on 14 October 2009. [6]
In general, the analysis of all of
the above, we can conclude that an intergovernmental mechanism plays an
important role in the development of economics and trade cooperation between
China and Kazakhstan. However, in the framework of its discussion is conducted
mainly large, the most important projects of bilateral ties. However, in the
field of integration of Kazakhstan and China in the economic sphere is no
significant documents between Kazakhstan and China, there is no comprehensive
program of mutual cooperation and integration, including development programs
for transportation of hydrocarbons, including program development pipelines.
Thus, there is a clear discrepancy
between the administrative and institutional mechanisms for the regulation and
coordination of foreign economic relations in Kazakhstan and China. And from
this discrepancy (i.e. the actual imbalance and inconsistencies infrastructures
Foreign Economic Relations) primarily plays Kazakhstan.
There is a certain gap in
organizational efforts to bring about economics and trade relations with China
at the macro and micro levels. If through the establishment of
intergovernmental relations in the implementation of large international
projects done really a lot (but a lot still to be done), the structure of
foreign economic activity at the level of its specific subjects does not
correspond to the challenges of development of the Kazakh-Chinese economic
relations.
In our view, an annual rise in
hydrocarbon turnover between the two countries requires the adoption of a
single integrated program of mutual cooperation in this area.
Summary
In this article the author discusses
the relationship between China and Kazakhstan on the transportation of
hydrocarbons. This article provides an analysis of existing relations and made
suggestions for their improvement.
In this article the author examines
the relationship between China and Kazakhstan on the transportation of
hydrocarbons. The paper analyzes the existing relationships, and make
suggestions for their improvement.
References:
1. V. Paramonov, strings A. Oil and gas interests of
China in Central Asia // www.easttime.ru/analitic/1/8/796.html
2. Global energy security. July 16, 2006 // http // www.energodialogue.com.
3. A. Manvelyan Russia-China: The Struggle for Kazakh oil (oil war) //
www.noravank.am/rus/issues/detail.php?ELEMENT_ID=2665
4. V. Paramonov, strings A. Oil and gas interests of China in Central Asia
// www.easttime.ru/analitic/1/8/796.html
5. V. Paramonov, strings A. Oil and gas interests of China in Central Asia
// www.easttime.ru/analitic/1/8/796.html
6. http://www.newskaz.ru/economy/20101220/996994.html