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Last Updated: Monday, 23 February, 2004, 18:10 GMT
Kazakhs plan China oil pipeline
By Ian MacWilliam
BBC, Almaty

Oil refinery
The Kazakhs can help with China's energy needs
Kazakhstan is expecting to start building an oil pipeline to China later this year, the head of the country's national oil company has said.

Uzakbay Karabalin said work on the longest section of the planned pipeline is likely to begin in July or August.

The pipeline will enable Kazakhstan to export its substantial reserves of oil to the east, where China is seeking new energy sources for its growing economy.

Kazakh officials have long talked of building a pipeline.

But these plans were initially considered to be unrealistic.

Forging ties

Oil from the Caspian has traditionally been exported to Russia, or more recently to Western markets via the Black Sea.

But the vast and growing market in China is hungry for new energy sources and Beijing has been cultivating economic ties with Central Asia.

Kazakhstan for its part is keen to find new markets for its vast oil reserves, and Mr Karabalin has said he sees China as one of the most promising markets for his country.

But exporting oil to the east, rather than the west, requires a 3,000 kilometre pipeline right across the plains of central Kazakhstan.

New deals

This pipeline is now taking shape. Two sections already exist; two more sections must be built to connect them.

It is the last and longest section, from central Kazakhstan to the Chinese border which the two countries plan to begin building this summer.

Kazakhstan also expects to sign a deal in the coming days with a consortium of big Western oil companies which will open the way for exploitation of another major Caspian oilfield, Kashagan.

The giant Kashagan field is one of the biggest new oilfields discovered in recent years.

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