Kazakh oil to China suspended over contamination


Kazakh oil to China has been reduced along the Atasu-Alashankou pipeline this week after tests carried out earlier in January showed a high content of organic chloride, three trade sources familiar with the matter told Reuters on Tuesday.

Organic chloride found in the oil varied between 70 and 120 ppm (parts per million), the sources said, far exceeding the limit of 6 ppm allowed in Russia and Kazakhstan.

In April of last year, a high level of organic chloride was found in late April in Russia’s Druzhba pipeline, which connects Siberian oilfields with Belarus, Ukraine, Poland, Germany, Czech Republic and Hungary. Dirty oil in the Druzhba disrupted exports from Russia to the West and has led to protracted negotiations over compensation. Russia’s LUKOIL and Hungary’s MOL were the first to settle.

The organic chloride contaminants result from compounds used in by the oil industry to boost extraction from oilfields by cleaning oil wells and accelerating the flow of crude. These compounds must be removed before oil enters pipelines as they can destroy refining equipment or, at high temperatures, create poisonous chlorine gas.

Tests by Belarus on oil from Druzhba showed organic chloride levels of 150-330 parts per million (ppm) between April 19 and 22, according to Gomeltransneft documents seen by Reuters, well above the maximum 10 ppm allowed by Transneft.

With regard to the situation occurring in January 2020, CNPC Aktobemunaigas, a Kazakh subsidiary of Chinese energy group CNPC, has been cut off from the Central Asian nation’s oil pipelines since Jan. 16, pipeline operator Kaztransoil said on Wednesday. CNPC Aktobemunaigas was Kazakhstan’s sixth-largest producer in 2018 with output of 4.9 million tonnes, about 4.3% of the country’s total production.

Unlike the Druzhba pipeline problems in April last year, when 5 million tonnes of oil were contaminated with organic chlorides, the origin this time was Kazakh oilfields, though the volume affected remains unclear.

Kazakh oil exports to China will be resumed after the issue with CNPC Aktobemunaigas oil quality is fixed, the Kazakh energy ministry said. Kaztransoil has also reviewed shipment plans for the Shymkent and Pavlodar oil refineries, it said without providing any details on volumes.

The impact in terms of volume does not seem to be considerable, given that the Pavlodar refinery has been running close to 100,000 bpd, said Florian Thaler, strategist and chief executive at consultancy OilX.

Tests of crude oil in the Kazakh pipeline system carried out this week showed organic chloride content of 70-120 parts per million (ppm), which far exceeds a 6 ppm limit allowed in Russia and Kazakhstan.

Russian and Kazakh pipeline systems are linked, with Kazakhstan moving 15 million tonnes of oil a year via Russian ports. Russia’s oil pipeline operator Transneft reported through the Interfax news agency that Russian oil supplies to and from Kazakhstan are running as normal. Russian exports to China are similarly flowing normally, Transneft has said.

Source: Reuters, Hydrocarbon Processing