Kazakh oil pipeline, the new Silk Road to China

Astana (AsiaNews/Agencies) – A 3,000-km pipeline that could deliver up to 20 million tonnes of oil per year to China from Kazakhstan should be completed by December of this year.

Kazakhstan, the third largest oil producer in the world with reserves estimated at nine billion barrels and an output of 1.1 million per day equal to Libya and Algeria is expected to pump 3 million barrels per day by 2015.

China National Petroleum Corporation, China's largest oil company, and Kazakhstan National Petroleum and Natural Gas Company are building the new pipeline at an estimated cost of US$ 3 billion. Until it becomes operational, Kazakh oil will continue to reach China by train.

Once in business, the new line will run from Atasu (eastern Kazakhstan) to Dushanzi in China's Xinjiang province, where the oil will be refined and shipped to the energy-starved eastern regions of the country.

A feasibility study for a project to build a gas pipeline is also under way; once built, it should send Kazakh natural gas to Xinjiang where it would continue for another 4,000 kilometres from the Tarim basin to Shanghai on an existing pipeline.

The network of lines could eventually reach Uzbekistan and Turkmenistan as well as Russia and Iran, creating a pan-Asiatic system.

A similar project had been studied some years ago but shelved because of its excessive costs. Now, China's rising energy demands have made it more feasible.

China is in fact involved in exploration activities in Uzbekistan and new hydro development in Kyrgyzstan and Tajikistan.

In 2003, trade between Kazakhstan and China reached US$ 3 billion, more than double of what it was in 2000 (US$ 1.5 billion). In the first months of 2004, it grew by a 87.7 per cent.

China imports steel and oil products, wheat and meat and exports food items, textiles and rail equipment.  (PB)