Transneft Receives Russian Share in the Caspian Pipeline Consortium

Transneft increased its share capital after transferring the Russian Federation's share in the Caspian Pipeline Consortium (CPC) to the company's balance sheet. The capital grew by 35 billion Rubles.

In February last year, Russian President Vladimir Putin ordered an additional issue of ordinary shares of Transneft by investing 100% of the shares of two companies in its capital, one of which owns a stake in CPC Company and CPC Investments Company.

In December, Transneft shareholders approved an increase in the share capital followed by the handing over of 10 thousand shares of each company with a total value of 35 billion Rubles. CPC Company and CPC Investments Company are registered in the Cayman Islands.

The Tengiz-Novorossiysk pipeline system, known as the CPC (Caspian Pipeline Consortium), has been in operation since the end of 2001. The length of the pipeline is 1.5 thousand kilometers. Kazakhstani oil is delivered through it through Russia to Novorossiysk, where it is shipped to tankers for subsequent shipment to world markets.

Since 2005, CPC, using antifriction additives, has gradually increased the volumes of transportation. In 2010, these amounted to 35 million tons per year, and a year later the project began to expand the pipeline system of the consortium. New facilities were commissioned to meet the annually growing transportation volumes.

The increase in transshipment volumes was largely due to the expansion of the resource base of the CPC pipeline system: if previously the main volumes were from the Tengiz and Karachaganak fields, now others were added to them: the Kazakh Kashagan, Filanovsky and Korchagin fields are in Russia.

Currently, "black gold" in the CPC pipeline system comes from more than 10 fields. Last year, the pipeline marked a kind of anniversary - 500 million tons of "black gold" had been pumped through it.

The CPC's shareholders are the Russian Federation (24% for Transneft, 7% for CPC Company), 31% for Kazakhstan (20.75%), Chevron Caspian Pipeline Consortium Company (15%), Lukoilco B.V. (12.5%), Mobil Caspian Pipeline Company (7.5%), Rosneft-Shell Caspian Ventures Ltd (7.5%), BG Overseas Holding Ltd (2%), Eni International N.A. N.V. (2%) and Oryx Caspian Pipeline LLC (1.75%).

By Dimitri Dolaberidze