Panorama” How the Project’S Present and Future Looks from Kazakhstan

July 2014 In Focus: Western Region p. 8–37 Contents: CPC pipeline’s importance continues growing • p. 1 / Build-up relations, assert reputation • p. 3 / “The company is our shared zone of responsibility” • p. 8 / The pipeline of good deeds • p. 13 / Report from Russia’s largest PS • p. 14 / Permanent readiness team • p. 17 / Alert drill on Environmentalist’s Day • p. 32 / Fueling a shared victory • p. 42 / Libraries at PS • p. 48 IN THE FIRST PERSON Kairgeldy Kabyldin: “Our country expects major development achievements from the CPC pipeline” CPC IS A TIME-TESTED, SUCCESSFUL AND DYNAMICALLY DEVELOPING INTERNATIONAL PROJECT. CPC SHAREHOLDER COMPANY REPRESENTATIVE, “KAZMUNAIGAZ” MANAGEMENT COMMITTEE DEPUTY CHAIRMAN, KAIRGELDY KABYLDIN, TOLD “CPC PANORAMA” HOW THE PROJECT’S PRESENT AND FUTURE LOOKS FROM KAZAKHSTAN. In 2013, Kazakhstan exported – Construction efforts within the 72 million tons of oil, of which pipeline’s Kazakh segment include 28.7 million tons, or 40%, were modernization of two existing exported via the CPC pipeline. pump stations (PS Tengiz and PS Atyrau), construction of two The oil transported through the new pump stations (A-PS-3A and CPC pipeline comes mostly from A-PS-4), pipe replacement to a total the oil fields of Western Kazakh- length of 88 km, external power stan, namely Tengiz, Karachaga- supply to PS Atyrau, PS Tengiz, nak, Uzen, Martyshi and some A-PS-3A and A-PS-4, and construc- others. tion of a new high voltage power line – OHPL 220 kV. Plans call for increasing Kazakh- stan’s oil supplies to the world Aiming to boost efficiency and expe- market in connection with the pro- dite project work, “KazMunaiGaz”, jected increase of production from together with CPC and “Kazakhstan the Tengiz field and the production Pipeline Ventures”, has implement- launch at the Kashagan field. ed a number of organizational and structural changes to transfer proj- – Mr. Kabyldin, as we know, Therefore, as before, our coun- ect management powers directly to you have been with the CPC try expects major development the production sites. Pipeline Project from the very achievements from the CPC start. Can you say that the pipeline and the CPC Expansion As things stand, we have resolved pipeline’s significance as an Project, which will allow us to a number of issues relating to export vehicle for Kazakh oil dramatically increase the volume the development of an integrat- remains as high today, after of oil supplied from Kazakhstan to ed work completion schedule, 13 years have passed from the world markets. engineering, division of project pipeline’s launch? management powers, setting up – As we know, within the working groups, and appointing – Without doubt, the CPC pipe- framework of cooperation with managers for the CPC Project Man- line is currently the main export CPC, you supervise construc- agement Group at all four pump vehicle for Kazakh oil. Also, the tion work at the pump stations stations located in Kazakhstan. pipeline has no rivals in its attrac- located in Kazakhstan. Could tiveness for Kazakh oil suppliers you elaborate on the specific Apart from the coordination and from an economic viewpoint. tasks and issues related to monitoring of construction work, these duties? we are actively working with IN THE FIRST PERSON contractors to help resolve their By the end of 2014, we plan to Construction work is being man- routine issues and problems relat- complete upgrade of PS Atyrau aged on an on-going basis with ed to project implementation, sup- and PS Tengiz. Construction of two issues being resolved involving all plies of materials and equipment, new pump stations (A-PS-3A and stakeholders, and the work prog- manpower needs and mobilization A-PS-4) is scheduled to be finished ress of the contractors is perma- of subcontractors. in 2015. nently monitored. – What is the current status of Among projects scheduled to be com- I believe that the measures to be construction work progress? pleted in 2014 are the construction taken to overcome delays will be What is left to do before the of a new high voltage power line, effective and that our construction work is completed? OHPL 220 kV, construction of new contractors will fulfill their obliga- substations for electrification A-PS-3A tions and complete their work by – Construction and installation and A-PS-4, and modernization of the target dates established in the work to replace pipes to a total the existing substation in Atyrau. newly agreed schedule. Head office of “KazMunaiGaz” National Company length of 88 km was complet- – Do you think that the CPC Also, I would like to note that the ed in 2013, and on May 20-23, pipeliners will succeed in com- ongoing work progress within the 2014, during pipeline scheduled pleting the work on schedule, Russian section gives reasons to shutdown the new constructed so that oil production in the expect the timely completion of segment was tied-into the trunk republic is not held back? the project as a whole. pipeline. Currently, the segment is operating in a comprehensive test- – Together with all other project – You communicate a lot with ing mode. This is the first major participants, “KazMunaiGaz” managers and specialists from task to have been accomplished is doing everything possible to CPC and the consortium’s as part of the Expansion Project in expedite work within the Kazakh shareholder companies. How Kazakhstan. segment of the Expansion Project. would you appraise the level of www.cpc.ru July 2014 Panorama CPC 1 IN THE FIRST PERSON mutual understanding between over manual arc welding, and inte- environmental domains as well as “KazMunaiGaz” and the Ex- grated surge relief systems, which biodiversity and ecosystems. pansion Project participants? react on any pressure jump in the pipeline and allows increasing its In line with our business practice, – Representatives from “KazMu- operational safety. we communicate and consult naiGaz” and “Kazakhstan Pipe- with various interested parties, line Ventures” are permanently The CPC Expansion Project also including government structures, present and actively working at involves the practice of using dry the local population, suppliers and the Expansion Project’s sites. We air (dew point minus 20°C) for employees, on matters pertaining have developed particularly close drying pipeline interiors, which is to industrial and environmental cooperation with the management both environmentally friendly and security within the framework of of CPC and construction contrac- economically advantageous, since the Expansion Project. tor “KazStroiService”. We are well it avoids the use of methanol as a acquainted with “KazStroiService” corrosion inhibitor. We are certain that the measures as we worked together earlier on to be taken to ensure industrial the Kazakhstan-China oil pipeline On the whole, we are certain and environmental security will al- construction project. that the numerous innovative low us to achieve our major goal – approaches employed for the Ex- reducing to the minimum our pansion Project, which are based environmental impact, accident on the best practices of CPC and rate and work-related injury rate its shareholders, will ensure the at CPC facilities, as well as, also pipeline’s high performance, its importantly, ensuring rational accident-free and reliable oper- use of the natural resources of the ation as well as environmental Republic of Kazakhstan. security. – Which tasks facing CPC today – What do you do to monitor are most important and signifi- and control industrial and cant? environmental security at the construction facilities? – Today’s priority tasks include the most rapid completion of all – Industrial and environmental se- construction work for the CPC curity standards employed for the Expansion Project and commis- Pipeline construction in Kazakhstan under project are in compliance with the sioning of new facilities. the CPC Expansion Project relevant Kazakh requirements and generally accepted international I would like to emphasize that it is standards. of special importance for Kazakh- I believe that our specialists have stan that these new facilities are achieved an adequately high level Our contractors/subcontractors launched by the time when com- of mutual understanding with all are committed to using the best mercial scale production is started project participants to the extent practices of standard compliance. at the Kashagan field, because the that they need to carry out their Some of them are certified under CPC pipeline is the most attractive tasks. ISO 14001. Monitoring and control option for Kazakh oil supplies of industrial and environmental from a commercial viewpoint. – Which innovative methods security compliance is performed Also, I want to stress the impor- are being employed in the by all project participants and HSE tance of ensuring the economic construction of new facilities in specialists. efficiency of the project for its Kazakhstan within the frame- governmental shareholders – Rus- work of the Expansion Project? A particularly important element sia and Kazakhstan. of system management is Indus- – Both proven and innovative trial Environmental Monitor- Of course, on a par with the proj- methods are being employed in ing, which involves monitoring ect’s economic and commercial the Expansion Project. atmospheric air, soil, surface and priorities, the main task facing ground waters. The main objective CPC and its shareholders is the The latter include semi-automated of the environmental monitoring safe and efficient functioning

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