Republic of Kalmykia

A working meeting was held today in Moscow between Caspian Pipeline Consortium Management and the delegation of the Republic of Kalmykia Government headed by its Chairman – Oleg Kichikov. Matters pertaining to the cooperation between the Republic and the Company in anticipation of the implementation of the Project to expand CPC pipeline system capacities. The Parties confirmed their adherence to the principles and arrangements locked in the Cooperation agreement between the Republic of Kalmykia Government and Caspian Pipeline Consortium-R executed in 2009, and also reviewed new forms of cooperation under the Expansion Project. In particular, mutual understanding was achieved about preparation by the Republic’s educational establishments of dedicated specialists for staffing the future facilities.

Reconstruction of the Komsomolsk Pump Station currently in operation and also construction of additional stations are planned as part of the Expansion Project to be implemented in the Republic. Local human and material resources are to be used for reconstruction and construction of facilities, those resources to be engaged on a tender basis. After the construction the Republic will receive additional tax payments from the Company’s business and also new jobs both in CPC contractors’ organizations and in the Consortium itself. Investments in the Expansion Project should give rise to the development of related production facilities in the Region.

In addition, CPC will continue its support to Kalmykia social sphere. Construction of a number of infrastructure facilities in the Districts crossed by the pipeline is envisaged under the Expansion Project. The Company will also continue funding its traditional charity programs for veterans, aged people, orphaned children and also talented children contest concerts.

CPC crude pipeline is the major transportation route of crude oil from the Caspian Region to the world markets. The trunk pipeline with the total length of 1511 thousand km connects the Western Kazakhstan fields with the Russian Black sea coast. Kropotkin Pump Station in Krasnodar Krai receives crude of the Russian origin coming to the system. CPC Marine Terminal is equipped with single point moorings allowing for safe tanker lifting at a significant distance from the shore, also under unfavorable weather conditions.

The Expansion which provides for an increase of CPC pipeline system throughput capacity up to 67 M tons per year will, according to the current assessment, be fully completed in 2014. The Expansion Project includes construction of 10 additional pump stations (2 in the Republic of Kazakhstan, 8 in the Russian Federation), six oil storage tanks near Novorossiysk and a third single point mooring at CPC Marine Terminal, as well as replacement of 88 km of the pipeline in Kazakhstan.

Caspian Pipeline Consortium