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China to invest in crude oil pipeline in Kazakhstan
Knight Ridder ^ | 5.18.04

Posted on 05/18/2004 9:30:57 PM PDT by ambrose

Posted on Tue, May. 18, 2004

China to invest in crude oil pipeline in Kazakhstan

By Tim Johnson

Knight Ridder Newspapers

BEIJING - China has agreed to invest in a major crude oil pipeline in neighboring Kazakhstan in the latest sign that Beijing is pushing for a foothold in the Caspian Sea oil basin to satisfy its deepening thirst for energy.

China earlier this year surpassed Japan as the world's second-largest oil consumer, and some experts say it may outstrip the United States in energy consumption in a decade and a half.

During a visit by Kazakhstan President Nursultan Nazarbayev, China National Petroleum Corp., China's leading oil company, signed an agreement to invest in an 807-mile-long crude oil pipeline in the central Asian republic, the China Daily newspaper said Tuesday.

The pipeline, expected to be completed in 2005, will bring Chinese oil companies closer to vying with major foreign oil companies for the huge reserves in the Caspian Sea region, a major source of energy outside the volatile Persian Gulf.

China's expanding search for secure and stable foreign oil supplies - vital to fuel the economic growth that keeps the Communist Party in power - is altering the global energy market and helping to keep crude oil prices at 13-year highs.

Last year, Kazakhstan sent about 7 million barrels of oil to China in railway tanker cars over the remote Allah Mountain Pass along their common border. A railway bottleneck forced a 26 percent drop in that small level of exports in the first three months of this year.

Construction on the pipeline, part of a $3 billion, 1,800-mile project, will begin in August, China Daily said, and will dramatically boost Kazak export capacity to China.

The pipeline will run from Atasu in northwestern Kazakhstan to the railway terminus at the border of China's Xinjiang Uygur Autonomous Region in the far west, the newspaper reported.

When the pipeline is finished, Kazakhstan's export capacity to China will hit 77.3 million barrels of crude a year. Capacity will double from that level when another section of the pipeline is built, the newspaper said. The precise route of that section is still undecided.

As China elbows into the energy market in the Caspian Shelf, it will be jostling in a region traditionally dominated by U.S. and Russian companies, making the Caspian political and economic chessboard more complicated, energy analysts say.

"Beijing's aggressive policies in the Caspian will unsettle both Russia and the U.S., which are themselves vying for control over the oil-rich region. The only certainty is that China will make a determined effort to secure as much of the Caspian's exports as possible," the Jamestown Foundation, a conservative Washington think tank, said in a report issued last week.

Other pipelines from the Caspian Sea region move oil to Russia and Georgia.

The official Xinhua news agency said Kazakhstan's state-owned KazMunaiGaz oil and gas company would acquire a 51 percent stake in the pipeline to China.

China is facing energy shortfalls as its economy gallops at a breakneck pace, tallying 9.8 percent growth in the first three months of this year.

China's crude imports soared 31 percent in 2003 over the previous year. The Paris-based International Energy Agency expects China's overall energy consumption to jump another 14 percent this year.

As imports surge, China is looking to reduce its reliance on Middle East oil. Saudi Arabia and Iran are China's No. 1 and 2 foreign energy suppliers respectively.


TOPICS: Business/Economy; Foreign Affairs
KEYWORDS: china; energy; kazakhstan; oil; pipeline

1 posted on 05/18/2004 9:30:57 PM PDT by ambrose
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To: ambrose; struwwelpeter; nunya bidness
Down in Kazakhstan, they use a currency called "Tenge" (TYEHN-gyeh) which must have an exchange rate of a trillion to one [...] it's got tractors and dams and scarey-looking Genghis Khan guys on it. BTW: massive Chinese presence down there - and they say that the CHICOMs are buying up Tadzhikistan as well. Suspicious.

Heard on the C-Street DECEMBER, 1999

2 posted on 05/18/2004 9:56:37 PM PDT by Askel5
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To: Askel5
The Chinese have got a tough choice. They can get pipeline that could spur off to the Japanese or they can get a direct route that could run through the Mongol territory.

Pooty-poot could also seek the American market through the northern ports. So many choices.

3 posted on 05/18/2004 10:37:42 PM PDT by nunya bidness (Yorktown)
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To: ambrose

"China to invest in crude oil pipeline in Kazakhstan"



I wished journalists learned to use hyphens when needed. The journalist here is talking about a "crude-oil pipeline," a pipeline for crude oil. A "crude oil pipeline" is a an oil pipeline that is not very complex.


4 posted on 05/21/2004 7:13:52 PM PDT by AuH2ORepublican (Extremism in the defense of liberty is no vice, moderation in the pursuit of justice is no virtue.)
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To: ambrose

"I wished journalists learned to use hyphens when needed."



And I *wish* I would remember to proofread my posts before hitting "post" so that I could avoid typos such as writing "I wished journalists learned . . ." : )


5 posted on 05/21/2004 7:16:10 PM PDT by AuH2ORepublican (Extremism in the defense of liberty is no vice, moderation in the pursuit of justice is no virtue.)
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