CPC Is Ready for Kazakhstan's Big Oil
The construction of the Caspian Pipeline Consortium's (CPC) trunk oil pipeline infrastructure, which kicked off in 1999, has emerged as one of the largest investment projects in the energy sector involving Kazakhstan, Russia, and global upstream players. The 1,511-kilometer-long Tengiz-Novorossiysk pipeline is a crucial artery connecting the oil fields of Western Kazakhstan to the marine terminal in the port of Novorossiysk. From there, oil is loaded onto tankers and dispatched to global markets. This pipeline transports more than two-thirds of all of Kazakhstan's export oil, along with raw materials from Russian fields, including those located in the Caspian region.
A Bit of History
Oil pumping volumes through the CPC system have been steadily increasing year by year. It was only on October 13, 2001, that the first tanker was loaded at the CPC's Sea Terminal. By mid-2004, the pipeline had fully reached the planned index of the first stage of throughput capacity - 28.2 million tons. In December 2009, the consortium's shareholders approved a plan to expand the pipeline's capacity to 67 million tons per year, addressing a comprehensive set of organizational, technical, financial, and commercial issues.
During the Expansion Project implementation, one of the pipeline sections in Kazakhstan was replaced with a larger diameter pipe (from 700mm to 1000mm). Ten new oil pump stations (PS) were constructed - two in Kazakhstan and eight in Russia. Additionally, two existing PS, Atyrau and Tengiz, were overhauled. In October 2017, the CPC put all the Expansion Project's facilities into operation, increasing the pipeline's capacity to 67 million tons per year.
However, even this capacity will soon be insufficient. Given that a large-scale Future Growth Project / Wellhead Pressure Management Project is nearing completion at the Tengiz field, in 2019, the CPC shareholders decided to undertake another capacity expansion. This project received the official title Background CPC Debottlenecking Program (DBNP). More precisely, this is an entire series of projects combined into a single program, being implemented in Kazakhstan and Russia. The DBNP's goal is to prepare the CPC's pipeline system for increased oil pumping volumes by modernizing existing capacities. A correspondent from Petroleum visited the CPC's production facilities to witness the implementation of the DBNP first-hand.
From Tengiz to Novorossiysk
The Tengiz PS, the starting point of the CPC pipeline route, is often referred to as the "zero kilometer." From here to the 130th kilometer lies the jurisdiction of the pipeline operators under the leadership of CPC veteran and head of the Tengiz PS, Ondasyn Shakan.
The PS is a complex of facilities, which includes main and booster pumps, an oil metering station, oil filters and traps, a system for measuring the volume and quality indicators of oil, control rooms, treatment facilities, and a storage tank farm. Working 24/7, the station receives 85-87 thousand tons of oil daily from the TCO plant located a few kilometers away. The entire technological process is fully automated and managed from the control room, where the shift supervisor maintains communication with all personnel, including colleagues at the Marine Terminal in Novorossiysk.
As part of the Debottlenecking Program, a reconstruction was carried out, specifically installing two underground drainage tanks; the commercial metering station was supplemented with two additional lines, increasing its capacity to 6,800 cubic meters per hour.
"At present, we are receiving 4,400 cubic meters per hour," says Ondasyn Shakan, the head of the Pump Station. "This is what we currently receive from Tengizchevroil (TCO). In the future, productivity is planned to be increased - when TCO completes the Future Expansion Project, the volume of oil supplies will increase to 6,000 cubic meters per hour."
According to Rafael Ualiyev, Deputy Manager of Operations and Maintenance of the Eastern Region of CPC, the Tengiz PS's storage tank farm consists of four tanks, each with a capacity of 20,000 cubic meters. In June 2023, two new tanks, each with a volume of 20,000 cubic meters, are expected to be commissioned.
"The tank farm performs a buffering function, enhancing the reliability and safety of the Pump Station's operation," explains Rafael Ualiyev. "Simply put, not all incoming oil immediately goes into the pipe. The filling of the tanks depends, among other things, on the operating mode and productivity. Interestingly, in Kazakhstan, only two CPC pump stations have their own tank farms - the Tengiz PS and the Atyrau PS."
As of today, the DBNP is considered complete, with major work having been finished as early as December: new pumps, technological and auxiliary equipment, control systems, and communications have been connected. Due to the commissioning of new facilities, the fire and gas detection systems underwent technical rearmament. The latest technologies and equipment were used in the upgrade, for instance, a system for frequency regulation of electric motor pump units has been installed and is operational at the Tengiz PS for the first time.
CPC is already prepared to accept increased volumes of oil. According to the DBNP, the throughput capacity of the pipeline system increases to approximately 72.5 million tons of oil per year from Kazakhstan and up to 81.25 million tons across Russian territory. For this year, oil companies have applied for the pumping of 66 million tons of oil, 59.5 million of which are from Kazakhstan (including 29 million tons from Tengiz, 11 million tons from Karachaganak, and 15 million from Kashagan).
Reliable and Shortest Route
In 2022, CPC transported 58.7 million tons of oil, including 52.2 million tons of crude from Kazakhstan. The major volumes of oil were dispatched into the pipeline system from large Kazakhstani fields: 29 million tons from Tengiz, 12 million tons from Kashagan, and 10 million tons from Karachaganak. From the CPC's Marine Terminal, oil transshipment was carried out onto 527 tankers.
The Caspian Pipeline Consortium (CPC) has remained one of the most optimal and reliable routes for transporting Kazakhstani oil, opines Kairgeldy Kabyldin, the Deputy General Manager for Government Relations of CPC in Kazakhstan.
"Only the shareholders and consignors of CPC can decide which methods to use for delivering crude to consumers. The international consortium itself, established a quarter-century ago to strengthen global energy security, has all this time been successfully operating outside of politics and does not comment on it," said Kairgeldy Kabyldin at a press conference in Atyrau, answering a question about how the CPC management views Kazakhstani consignors beginning to consider alternative export routes bypassing the Russian Federation.
"As for alternatives to the CPC, they are undoubtedly present, but you know, creating an alternative oil transportation route is no simple task," emphasized Kairgeldy Kabyldin. "We, Kazakhstan, are a landlocked country. We don't have access to open seas. Thus, we must cross the territory of other countries. This implies transit risks. Therefore, any route is an expensive project, and it requires corresponding guarantees. As of today, there is no oil in Kazakhstan that would justify the construction or design of a new pipeline."
Also, the Deputy General Director of CPC-K noted that the implementation of the DBNP will not affect the tariff policy, and the CPC does not intend to revise the transportation tariff. "The tariff is approved by all participants of the consortium, is optimal, and the shareholders do not plan to revise it," he underlined.
The CPC also does not intend to further expand the capacities of the Tengiz - Novorossiysk oil pipeline: "The Debottlenecking Program has already given the consortium a substantial surplus of capacities, satisfying all consignor requests," emphasized Kairgeldy Kabyldin.