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Magazine       "Oasis"
No. 20 (20) December 2005
No. 19 (19) December 2005
No. 18 (18) November 2005
№ 17 (17) November 2005
No. 16 (16) October 2005
№ 15 (15) October 2005
No. 14 (14) September 2005
No. 13 (13) September 2005
12 (12) August 2005
11 (11) August 2005
No. 10 (10) July 2005
No. 9 (9) July 2005
No. 8 (8) June 2005
No. 7 (7) June 2005
No 6 (6) May 2005
No 5 (5) May 2005
No. 4 (4) April 2005
No. 3 (3) April 2005
No 2 (2) March 2005
No 1 (1) March 2005
on       journal [PDF]:
Oleg Panfilov,
project Manager,

Dmitry Alyaev,
chief editor,

Roman Zyuzin,
webmaster [at] cjes.ru

Adil Dzhalilov,

a diamond stylus,

Nargis Zokirova,
zokirova77 [at] mail.ru

Representative Names
in Uzbekistan and Turkmenistan
not disclosed

Lyudmila Burenkova,
technical editor,
lyuda [at] cjes.ru

Elena Dorokhova,
Incomprehensible pipeline
Jaroslav Razumov
In Kazakhstan, almost all the years of independence, the topic of export pipelines was constantly and actively discussed. There were two shocks to this. The first is the opinion formed soon after the collapse of the Soviet Union, largely influenced by Western politicians, that Kazakhstan is fabulously rich in oil (although, of course, there are certain objective grounds for such assessments), the second is the desire for the maximum possible independence from Russia. After all, the only oil pipeline at the time of the collapse of the USSR, which came from the republic and automatically became export due to this collapse, went to Russia, to Samara.

In the spring of 1997, quite unexpectedly, a document was signed between the leaders of Kazakhstan and China on the construction of an oil pipeline from Kazakhstan to the PRC. It became a sensation - in the open mode before this idea was not worked out even at the level of informal expert discussions. There was a general feeling that such a decision turned out to be unexpected in Kazakhstan, to a greater or lesser extent, absolutely for everyone. Soon the feeling of shock from such an unexpected and grandiose project began to be replaced by other emotions. Often negative, as the charge of chinathobia clearly appeared in society. Then this topic began to sound in the political sphere. Opposition movements have actively criticized the authorities for supporting the project, speaking of the beginning of the "Chinaization" of Kazakhstan. Probably, these concerns could be easily calmed down if the authorities explained the details of the project. How will it be financed? Whose working staff will build? What are the conditions and by whom? Why, in fact, this project is needed by Kazakhstan, since there are no problems with the export of oil and with its sales in traditional markets? And finally, where to get the 20 million tons of oil required for filling the pipeline (its design capacity)? At that time, it was more than half of the oil produced in Kazakhstan, with the lion’s share being produced (respectively, and controlled by it) by western companies, the desire of the vast majority of which to supply oil to China was not heard. And the volumes that the Chinese National Oil and Gas Corporation mined in Kazakhstan near the city of Aktyubinsk were clearly not enough.

These are the questions that recall to the project that sounded in the second half of the 1990s, because today even the majority of them do not have a clear answer. In those years, the project somehow forgot about itself, gradually it was just stopped to write and talk about it, because the matter did not go beyond political declarations. This made it possible for local analysts even to assume that the project of this pipeline was simply a way of political pressure on Moscow and Washington in order to show the latter that Almaty (not Astana then) has opportunities for geopolitical maneuvering. Also, some believe now. For example, the well-known Kazakhstani political analyst Konstantin Syroezhkin sees in the desire of Astana to carry out this project, an attempt to weaken the influence of Moscow and Washington:

- Geopolitics are more than economics. This is the result of the desire to diversify export routes. To a certain extent, both the oil pipeline to China and the Baku-Ceyhan route both weaken Russia's monopoly and, as it were, balance each other.

But if Kazakhstan’s reason is really in this (playing with such partners is risky for a young country, but suppose we decided on it), then what are the reasons for China? What is more for him in the project of a complex and expensive oil pipeline - geopolitics or economics? This is now the main question to determine the future of all this great intrigue.

Just as unexpectedly as in 1997, at the beginning of 2004, the project experienced its rebirth. And again the same mysterious. Many in Kazakhstan are wondering: why does the country need this project? The only argument “for” is that oil consumption in China is growing. But does it fall somewhere in the world? Today, any regional market in the world is stable and reliable for the seller of oil. Against the background of such ambiguities, a noticeably not yet sharp, but already existing revival of fears is noticeable - is this project for China, first of all, a tool for expanding its geopolitical influence? Moreover, it is still not clear where the oil will be taken for deliveries through this pipeline. Officials of Kazakhstan, in particular, Energy Minister Vladimir Shkolnik, say that in accordance with the Kazakh-Chinese agreements on the construction of the pipeline, filling and providing it with oil is the responsibility of the Chinese side. But in Kazakhstan itself now it is hardly possible to find more than 10 million tons for this. Is this a strategic volume for China? Is it worth it for the "fence garden", or rather, the "Chinese wall" of pipes and ambitions?

As one of the sources of oil for a project, sometimes they talk about the possibility of Russian supplies. Lyazzat Kiinov, the vice minister of energy and mineral resources, said this summer: “For the time being, we expect that the filling will go at the expense of Siberian oil — we have such an opportunity.” This is not just the officials. A well-known economist, and in the past an employee of the Economic Research Institute at the Ministry of Economy of Kazakhstan, Kanat Berentayev, also believes that the future “pipe” will be filled with significant participation of Russian oil.

- But it would be economically more reasonable not to build a latitudinal oil pipeline, but to work on the system of swaps. A Chinese oil company operating in western Kazakhstan would transfer oil to Russia via the existing pipeline to Samara, while Russians would supply a comparable amount of oil from Western Siberia via Kazakhstan via the pipeline from Omsk to Atasu station. Kazakhstan would have a profit from the transit of oil and, at the same time, it would not have risen in price, as it will be after the construction of a new oil pipeline to China, - says Mr. Berentaev.

There is an unconditional reason in this idea, but ... The possibility of delivering Russian oil to China through Kazakhstan to Kazakhstan, at the Russian Oil and Gas Congress-2005, was denied by the president of Transneft, a joint-stock company Semyon Vainshtok. He did not comment on the SWAP idea, spoke only about deliveries of Siberian oil along the future Kazakh-Chinese oil pipeline, but it seems that his words were exhaustive:

- I heard a lot about this pipeline from periodicals and various kinds of letters, but no one works with our company on this account. There are some negotiations with the oil industry, which is natural. And when they agree with them and come to us, then Transneft will say that we do not have such an opportunity. We do not have enough light oil for such supplies, and in general it is very expensive.

Another common opinion is that the oil pipeline is being built for the prospect of large oil from the Caspian shelf. But this does not remove questions, quite the contrary. Extraction of the first oil on the shelf is expected only in 2007. What will be its volume, cost (will it be cost-effective to pump it across all of Kazakhstan to China?), And will the American and European members of the Caspian consortium want to ease the position of the Chinese energy market to the detriment of their own?

What is the "bottom line"? The construction of the pipeline, the search for finance and oil for which the Chinese are taking on (and they will manage, it seems, both countries will be together!) And lack of clarity about the resource base for it. There is something to think the experts and the public to think about.
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