Kazakhstan to Directly Supply Kashagan Oil to China Due to CPC Damage

Kazakhstan plans to supply 50,000 metric tons of crude to China directly from the vast Kashagan field in December for the first time after a Ukrainian drone damaged the Black Sea terminal of the Caspian Pipeline Consortium (CPC), two sources told Reuters.

The CPC, which accounts for 1% of global crude supply and includes Russian, Kazakh and U.S. shareholders, has had to reduce exports because a key part of its loading infrastructure - a single-point mooring (SPM) - was damaged in the attack.

Currently, CPC is using just one of three SPMs, SPM-1, because SPM-2 was seriously damaged and SPM-3 is undergoing planned maintenance.

The crude will be exported from the Kashagan field to China, the world's biggest importer, via the Atasu-Alashankou pipeline. The oil is produced at Kashagan by the NCOC consortium, which includes China's CNPC and Japan's Inpex 1605.T.

CNPC is expected to ship some 30,000 tons of oil to China via the route, while Inpex will supply about 20,000 tons, the sources said.

CNPC and Inpex didn't immediately respond to Reuters requests for comments. Kazakhstan's energy ministry did not immediately comment on Kashagan exports to China but confirmed efforts to find additional routes for Caspian oil.

The Atasu-Alashankou pipeline runs from Kazakhstan to the Xinjiang region of China but usually carries oil from other fields in Kazakhstan.

Kashagan usually exports most of its oil via CPC to the terminal at the Black Sea port of Novorossiysk for further transportation.

"The incident at CPC's marine terminal did not lead to a complete halt in exports... The ministry, together with producers, is working to redistribute volumes and intensify the use of alternative routes," it said in a written response.

Located in the northern Caspian Sea, the vast offshore Kashagan oil and gas field, named after 19th-century Kazakh poet Kashagan Kurzhimanuly, is one of the largest fields discovered in the past 40 years.

Currently, oil deliveries through Atasu-Alashankou average 85,000–86,000 tons per month and might be boosted by additional oil exports.

Kazakhstan planned to ship 1.0 million tons via the route in 2025, down from 1.2 million tons in 2024. In the first 10 months of this year, 0.858 million tons were exported, according to the export data provided by the sources.

(Reuters)