Getting to work: in Kazakhstan
Kazakhstan gets cracking on China pipe
Kazakhstan started construction on its section of a pan-Central Asia pipeline today, a major project to link up Caspian Sea gas reserves with energy-hungry China.
The pipeline is the first significant independent gas link connecting the former Soviet region with eastern markets while bypassing Russia. Russian gas monopoly Gazprom is currently the main buyer of Central Asian gas.
"This project will be implemented in five stages with the final stage scheduled for completion by 2013," Reuters quoted Sauat Mynbayev, Kazakhstan's Energy Minister, as saying at a ceremony held in southern Kazakhstan today, marking the inauguration of the project.
A ceremony was held on the open steppe 40 kilometres north of the commercial hub Almaty - one of three sites in Kazakhstan where construction is under way.
The Kazakh link is part of a route that links Turkmenistan's natural gas deposits with China via Uzbekistan and Kazakhstan.
Uzbekistan also started construction of its part this month while Turkmenistan launched its segment last year.
Gas shipments will start in 2010 at 4.5 billion cubic metres per annum and will eventually reach 40 Bcm a year. China will receive 30 Bcm and Kazakhstan 10 Bcm.
China National Petroleum Corporation, which operates the project, has signed deals with state oil and gas players from Turkmenistan, Uzbekistan and Kazakhstan, giving them 50% stakes in their respective sections of the pipeline.
It has yet to announce the project's cost. Mynbayev declined to give the figure for the Kazakh section of the pipe.
Turkmenistan will be the major supplier for the 7000 kilometre pipeline.
Kazakhstan, which hosts 1300 kilometres of the pipeline, plans to extend its part in the future, connecting it to its own gas fields near the Caspian.
Russia's Gazprom buys about 50 Bcm of Turkmen gas annually for resale in Europe. It also imports about 11 Bcm from Uzbekistan and 8 Bcm from Kazakhstan.
To maintain its influence over Central Asian gas flows, Russia has signed agrrements with Turkmenistan, Uzbekistan and Kazakhstan to build a new pipeline along the Caspian, Reuters said.
Gazprom has also vowed to pay European prices for Central Asian gas from 2009, but the exact figure has not been revealed.