December 15, 2010 [CPC] - Final Investment Decision (FID) to expand the Caspian Pipeline Consortium (CPC) pipeline mechanical capacity to 67 MTPA was passed on Wednesday in Moscow.
The Decision defines all parameters of the Project: from financial, economic and Project Implementation Schedule to the HSE parameters. Construction is to begin in spring next year. Expansion is envisaged in three phases while completion of the Project is planned for 2014.
Estimated CPC Expansion Project cost is USD 5.4 bln. Financing of the Project and its ultimate profitability are guaranteed by the Ship or Pay Agreement under which Shareholders – Producer Companies undertake to use the expanded pipeline capacities. If the agreed delivery volumes are not reached, a relevant Producer Company commits to make payments to CPC in the amount of CPC’s revenue shortfall.
CPC Expansion Project that envisages expansion of the pipeline throughput to 67 MTPA includes construction of 10 additional pump stations (2 in Kazakhstan and 8 in the Russian Federation), six crude oil tanks in the vicinity of Novorossiysk and a third single point mooring at CPC Marine Terminal, as well as replacement of an 88 km pipeline section in Kazakhstan.
CPC Shareholders: Russian Federation (represented by Transneft – 24% and CPC Company – 7%) – 31%; Republic of Kazakhstan (represented by KazMunaiGaz – 19% and Kazakhstan Pipeline Ventures LLC – 1.75%) – 20.75%; Chevron Caspian Pipeline Consortium Company – 15%, LUKARCO B.V. – 12,5%, Mobil Caspian Pipeline Company – 7.5%, Rosneft-Shell Caspian Ventures Limited – 7.5%, BG Overseas Holding Limited – 2%, Eni International N.A. N.V. – 2% and Oryx Caspian Pipeline LLC – 1,75%.
