November 4, 2008

CNPC, KazMunayGas Sign Framework Agreement for Co-Operation in Gas Sector

The China National Petroleum Corporation and Kazakh state-owned energy company KazMunayGas have signed a framework agreement to expand co-operation in natural gas and pipeline operations.

According to the agreement, KazMunayGas will take all necessary measures to ensure that the natural gas produced by the China National Petroleum Corporation (CNPC) from the Aktobe oilfield is transported via the Kazakhstan-China gas pipeline, in addition to supplying five billion cubic meters (bcm) of natural gas to the pipeline.

The two sides will also jointly develop the Urikhtau gas condensate field and export five to 10bcm of natural gas to China on the basis of meeting gas demand in southern Kazakhstan.

The Beineu-Bozoy-Kyzylorda-Shymkent section of the Kazakhstan-China gas pipeline will be constructed and operated together by the two companies under this principle. The pipeline is designed to transport 10bcm of natural gas per year.

The two companies have also agreed to build the Kazakhstan-China gas pipeline judged on the amount of incremental natural gas resources.