OREANDA-NEWS. June 15, 2011. Since the beginning of this year crude oil shipment through the Caspian Pipeline Consortium system has dropped by 4.7% versus the same period of 2010. This drop has resulted from the scheduled repair work carried out this year, in particular, pipe recoating work at the Kazakhstan section, unfavorable season weather conditions hampering CPC Marine Terminal operation and also reduced crude oil deliveries to the system via Kropotkin PS. These fluctuations are being monitored, though they have no fundamental significance as they do not influence materially the Consortium’s performance metrics over quite a lengthy term which is reasonable to be taken into account for the Company’s operation analysis.

It is intended to offset the aforesaid drop in part by additional volumes of Kazakhstan crude oil which is currently being transported by less cost-efficient routes. With the increase of the pipe throughput capacity CPC Shippers will receive an opportunity to transport additional volumes of crude oil by a more profitable route, and the Consortium’s crude pipeline system, having an opportunity to offset the pumped volumes of crude oil received from the Shippers at various delivery points will become more flexible.

CPC system nominal capacity is currently 28.2 M tons per annum. In 2010 The Consortium Marine Terminal lifted 34.9 M tons (drag reducing agent is used for pumping). Over three-fourth of the crude oil shipped to Novorossiysk is delivered from the fields in Kazakhstan.

The Expansion assumes an increase of CPC pipeline system throughput capacity up to 67 M tons of crude oil per annum. The Expansion Project assumes an upgrade of the existing pump stations and construction of 10 additional pump stations (2 in the Republic of Kazakhstan, 8 in the Russian Federation), six crude oil storage tanks near Novorossiysk and a third single point mooring at CPC Marine Terminal, and also replacement of an 88-km pipeline section in Kazakhstan with a larger diameter pipeline.