Kazakh president orders diversification of oil supply routes after Russia’s CPC suspension order

Kazakh president orders diversification of oil supply routes after Russia’s CPC suspension order
By bne IntelliNews July 8, 2022

Kazakh President Kassym-Jomart Tokayev on July 7 ordered his government to diversify its oil supply routes, a day after a Russian court ordered the Caspian Pipeline Consortium (CPC) to suspend activity for 30 days, the president’s website said in a statement.

Kazakhstan is reliant on Russian pipelines for oil exports to Europe. A halt to the CPC pipeline, which supplies around 1% of global oil, would strain the oil market amid one of its worst supply crunches since the Arab oil embargo in the 1970s.

Tokayev also ordered a study into building a pipeline across the Caspian Sea, a previously proposed project that aims to carry Kazakh oil to Europe while bypassing Russia.

Tokayev did not explicitly mention the CPC pipeline, according to the statement.

The Russian court’s decision came after the Kazakh president pledged to help Europe restore its energy supplies. Observers have been speculating that Russia’s pressure on Kazakh oil exports is partly tied to Tokayev’s refusal last month to recognise Russia-backed Luhansk and Donetsk territories as independent states. 

Two dead in Tengiz blast

Also on July 7, two workers died and at least three more were injured due to an explosion at the Tengiz oilfield, Kazinform news agency reported.

The explosion occurred in a pipeline section during its testing. An investigation into the accident has been launched as per Section 3, Article 156 “Violation of Labour Protection Rules” of the Criminal Code of Kazakhstan, the report said.

Other local reports named Senimdi Kurylys as the contractor company carrying out the testing. The firm was working on pressure work at TCO with the aim of reaching completion by mid-2022.

The Tengiz field holds around 25.5bn barrels of oil, of which around 7bn-10bn barrels are recoverable. In 2021, Tengizchevroil (TCO), the operating company, reported production of around 534,000 barrels per day.