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The European Bank for Reconstruction and Development (EBRD) has lent a company jointly run by Kazakhstan’s oil pipeline operator and China’s largest oil and gas group US$81.6mn for a project linking the landlocked country’s oilfields to its main export routes.
The 10-year loan will allow Closed Joint Stock Company MunaiTas to refinance debt incurred in constructing part of its 448km oil pipeline connecting oilfields in the Aktobe region of central Kazakhstan to the Caspian Pipeline Consortium and the Atyrau-Samara export pipelines.
MunaiTas is 51% owned by KazTransOil (KTO), Kazakhstan’s national pipeline operator. The remaining 49% is held by CNPC International (Kazakhstan) LLP, a wholly-owned subsidiary of China’s Chinese National Petroleum Company.
Known as the Kenkiyak-Atyrau oil pipeline, the link cuts transport costs and opens up the export potential of oilfields in Central Kazakhstan by giving them access to international markets. Further work on doubling the pipeline’s capacity is planned.
Its design would also allow the flow of oil to be reversed, switching the flow east instead of west and thus enabling it to become part of the potential oil pipeline connecting the energy-rich Caspian region with China in the future.
The EBRD loan, initially guaranteed by KTO, will enable the borrower to repay an expensive cash-collateralised bridging loan and give it the option to switch later to project finance. At that point we could syndicate up to one third, says Bert van der Toorn, deputy director of the EBRD’s natural resources team at the signing ceremony in the Kazakh capital, Astana.
The borrower has agreed to implement an environmental action plan and the EBRD’s participation  will in addition encourage enhanced operational transparency through the setting of transparent policies on tariffs and pipeline access. This is part of the bank’s efforts to stimulate the development of institutions, laws and policies that directly promote the functioning of a sustainable market economy, van der Toorn adds.