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Kazakhstan pipeline set
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November 19, 1996: 8:44 a.m. ET
Oil companies, governments reportedly plan $1.5 billion project
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NEW YORK (CNNfn) -- Major oil companies and the governments of Russia, Kazakhstan and Oman have agreed to build a $1.5 billion pipeline aimed at clearing the bottleneck that has prevented large amounts of Kazakhstan oil from reaching Western markets, The New York Times reported Tuesday.
Construction on the new pipeline will start in 1997 and be completed in about two years. The pipeline will connect the oilfields in Tengiz, in Kazakhstan with a new port to be built near the Russian city of Novorossiysk, the paper said.
Chevron Corp. media relations manager Mike Libbey said negotiations on the project were concluded successfully last week and a final agreement will be signed in Moscow on Dec. 6.
The agreement is of major significance to Chevron, whose ability to produce oil from Kazakhstan fields is limited by the current pipeline system. Eventually, Chevron and its partners, Mobil and Kazakhstan, could spend up to $20 billion over the 40-year life of the project and upgrade their shipping capacity by several hundred thousand barrels a day.
Besides Chevron, other companies that will have an interest in the consortium include Russian oil company Lukoil; Mobil; Russian gas company Rosneft; AGIP SpA, a unit of ENI of Italy; British Gas; and Oryx Energy, based in Dallas, the Times said.
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