China, Kazakhstan unveil landmark gas pipeline

AP News
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Posted: Dec 12, 2009 9:51 AM

The leaders of Kazakhstan and China jointly unveiled Saturday the Kazakh section of a natural gas pipeline that will tap into Central Asia's vast energy riches and loosen Russia's influence over the region.

The pipeline, due to come online in days, is part of China's efforts to secure energy supplies for its booming economy.

The 1,300-kilometer Kazakhstan-China pipeline is the Central Asian nation's first export route that completely bypasses Russia.

The commissioning ceremony in the southern Kazakh township of Otar was watched by televised link from the capital, Astana, by Kazakh President Nursultan Nazarbayev and his Chinese counterpart, Hu Jintao.

"This is a grand construction project that will in time resurrect the ancient Silk Route," Nazarbayev said during the ceremony.

Kazakh state energy company KazMunaiGaz says the pipeline will eventually be able to transport 30 billion cubic meters of gas annually from Kazakhstan and Turkmenistan. Capacity could be boosted to 40 billion cubic meters, the company said.

Gas deliveries to China through the pipeline are expected to hit around 13 billion cubic meters in 2010, with supplies fulfilling pipeline capacity by 2013, after the route has been definitively completed.

Building the Kazakh section cost $6.7 billion and took more than 4,000 workers to complete in under two years, KazMunaiGaz said.

The bulk of financing for the project was supplied by the state-run China Development Bank, which has provided much of the funding for the Asian giant's energy shopping spree over recent months.

Hu is due to travel onward to Turkmenistan, where he will attend a ceremony this week marking the start of gas deliveries from the Central Asian nation.

The entire 7,000-kilometer (4,300-mile) Turkmenistan-China pipeline cuts through Uzbekistan and Kazakhstan into China's far western Xinjiang region.

Commencement of gas deliveries from Turkmenistan to China comes as the former Soviet nation remains mired in a dispute with Russia.

Turkmenistan has until recently sold most of its gas to Russia. However, supplies have been suspended since a pipeline blast in April that Turkmenistan blames on Gazprom.

The pipeline has been fixed, but deliveries to Russia have not resumed, which some international experts have estimated may be costing Turkmenistan $1 billion in monthly losses.