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30.04.2009

KazMunayGas Buys BP Pipeline Interest

(KazMunayGas) - KazMunayGas National Company completed the purchase of BP's share interest in the Kazakhstan Pipeline Ventures joint venture (KPV) holding 1,75 percent interest in the Caspian Pipeline Consortium (CPC). The benefit of the transaction for KMG is 100 percent ownership of KPV, which substantially increases KMG’s access rights to CPC.

The purchase price of BP’s 49,9 percent share of interest in KPV is $250 million with the payment being made in several tranches.

Currently, KPV’s CPC capacity right is 5 million tons per year (mty), which will grow to 10.5 mty upon completion of the CPC Expansion Project.

As a result of this transaction, KMG, as a shareholder of the CPC (with 19% held on behalf of the Republic of Kazakhstan plus 1,75% – newly acquired KPV share), will hold 14,3 mty consolidated access rights to CPC upon completion of the Expansion Project.

CPC is currently the most viable export option for Kazakh oil, providing direct access to the world markets via the Black Sea. CPC also has Oil Quality Bank.

In December 2003, CPC shareholders (excluding Lukarco B.V.) signed Memorandum on CPC Expansion Project Implementation Principles. It is expected, that the capacity of the CPC pipeline will grow to 67 mty with 50 mty capacity for Kazakh-originated oil. At present, the capacity of the CPC pipeline is 28,2 mty.

JSC National Company “KazMunayGas” (KMG) is a national oil and gas exploration, production, processing and transportation operator representing the Government of Kazakhstan’s interests in the country’s oil and gas industry. KazMunayGas is wholly owned by JSC “Sovereign Wealth Fund "Samruk-Kazyna.”

- Copyright 2009, KazMunayGas. All rights reserved. 

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