Bloomberg News

First Kashagan Crude Cargo to Load From Caspian CPC Terminal

September 12, 2013

Exxon Mobil Corp. (XOM:US) will load the first cargo of Kashagan crude at the end of October from the CPC Black Sea terminal, according to a loading program obtained by Bloomberg and two traders with knowledge of the project.

The 93,500 metric ton shipment will be shared between Exxon Mobil and Royal Dutch Shell Plc (RDSA), according to the program. This will be the first time that crude from the Kashagan oil field in Kazakh waters is exported via the Caspian Pipeline Consortium terminal, the traders said, asking not to be identified because the information is confidential.

Kashagan, slated to produce as much as 370,000 barrels a day during its first phase, has been pushed back several times from its original 2005 start date. Costs of the project in Kazakhstan reached $48 billion, more than double early estimates. The addition of sweet, or low-sulfur, crude may bring some relief to European refiners facing rising feedstock costs amid halts of exports from Libya and North Sea field outages.

“CPC is decent quality light crude, better than Kirkuk and similar to Libyan grades,” said Andrey Kryuchenkov, global commodities strategist at VTB Capital in London. In the long run it will certainly “add some competition in the Med basin, however it will take years for maximum capacity, and the short term market impact will be limited.”

Exxon Mobil didn’t immediately reply to a phone call and an e-mail seeking comment. Hans Wenck, a spokesman for operator North Caspian Operating Co. in Astana, Kazakhstan, said he couldn’t confirm the Exxon allocation. The CPC pipeline is one of two ways for Kashagan oil to be exported, the other being the KazTransOil link which ends in Samara, Russia, Wenck said.

First Oil

Kashagan produced first oil yesterday, eight years behind schedule, NCOC said in an e-mailed statement. Exxon, Shell, Total SA and Eni SpA (ENI) each holds 16.81 percent in the project. Japan’s Inpex Corp. (1605) owns 7.56 percent. State-owned KazMunaiGaz National Co. retains 16.88 percent.

CPC, operator of the only oil-export link in Russia that has shared foreign ownership, will keep daily October crude exports from the Black Sea next month at 659,197 barrels a day, little changed from 664,724 barrels a day in September. Loadings will be the lowest since March.

The preliminary October program comprises nine cargoes of 134,000 to 135,500 tons each and 17 consignments of 85,000 to 93,500 tons, according to the document.

The CPC pipeline, in which Chevron Corp. (CVX:US) is the biggest corporate shareholder with a 15 percent stake, carries crude from Kazakhstan’s western fields to a terminal near Russia’s Novorossiysk port on the Black Sea. Russia owns 31 percent of and Kazakhstan 21 percent. Exxon, OAO Lukoil and a joint venture between OAO Rosneft and Shell are among the other shareholders.

Loading programs are monthly schedules of crude shipments compiled by field operators to allow buyers and sellers to plan

To contact the reporters on this story: Laura Hurst in London at lhurst3@bloomberg.net; Sherry Su in London at lsu23@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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