China wants Kazakhstani oil

China is ready to finance the construction of an oil pipeline from Kazakhstan with an initial capacity of up to 20m tons of oil per year. According to KazMunayGas Managing Director Kairgeldy Kabyldin, who is in charge of the company's transportation infrastructure and servicing projects, the laying of the pipeline will start in the middle of 2004. "A joint decision with the Chinese National Petroleum Corporation on constructing the oil pipeline in the middle of 2004 has been adopted. It is aimed at delivering 20m tons of oil to China and up to 50m tons in the future. The Chinese side will provide all necessary financing," Kabyldin said. The pipeline is 1,000 kilometers long and the cost of its construction is $800m.

The oil pipeline might become the first pipeline that will join former Soviet republics with China's rapidly growing northwestern provinces. The Russia oil company YUKOS is also planning to lay a pipeline from its fields in Western and Eastern Siberia to Chinese provinces.

According to Kabyldin, the pipeline is planned to be filled in with oil produced by PetroKazakhstan and LUKoil at fields in the south of Kazakhstan and with oil produced by the CNPC in the west of the country. "The laying of the pipeline is to be finished by 2006," Kabyldin noted.