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New pact to pipe Kazakh oil to China
By Jiang Zhuqing (China Daily)
Updated: 2004-05-18 08:37

Two leading oil and gas companies from China and Kazakstan Monday inked an agreement on a major crude oil pipeline that may help boost Kazakh oil exports to China.

China National Petroleum Corp (CNPC) and Kazakstan's State-owned KazMunaiGaz will jointly invest in the construction of a 1,240-kilometre-long pipeline from Atasu in northwestern Kazakstan to the border of China's Xinjiang Uygur Autonomous Region.

President Hu Jintao and Kazak President Nursultan Nazarbayev shake hands at the signing ceremony of a joint communique in Beijing May 17, 2004. [newsphoto]

Construction on the project, which is the second section of a 3,000-kilometre trans-border trunkline, is expected to begin in August, said a CNPC news release. The pipeline's initial capacity is expected to hit 10 million tons of crude oil a year after its completion in 2005.

When completed, the three-section trunkline, with a total length of more than 3,000 kilometres, would be able to deliver up to 20 million tons of Caspian Sea crude to western China annually, experts said.

"Focusing on the construction of Sino-Kazakh oil pipeline, the two nations should seek new breakthroughs in their co-operation of energy sources," President Hu Jintao told visiting President of Kazakstan Nursultan Nazarbayev Monday.

With similar geopolitical situations and mutually complementary resources, China and Kazakstan are in a good position to work together, Hu said.

Both governments are pushing for a more relaxed and convenient environment to enlarge bilateral trade, he said.

Moreover, both sides should move towards easier transport through more integrated port freights and communication networks.

More Kazakh companies are welcome to take part in China's western development movement which can grow together with Kazakstan, Hu said.

For his part, Nazarbayev said China's development poses no threat to Kazakstan, but will, in fact, strengthen the relationship between the two countries particularly in relation to trade, energy and communications.

After their talks, the two leaders appeared at a signing ceremony for a joint communique, which is the main agreement for the oil pipeline, and six other documents.

The agreement says Kazakstan sticks by the one-China policy and opposes the independence of Taiwan as well its attempts to join any international and regional organizations that require national sovereignty.

The two nations agree that terrorism, separatism and extremism severely threaten world safety and vow to strengthen bilateral and multilateral co-operation to fight against these forces.

Both nations will combat all forms of terrorism, including the Eastern Turkistan groups, said the communique.

Hailing the trans-border oil pipeline as a project of great strategic importance to Kazakstan, Kazakstan's Prime Minister Daniyal Akhmetov said his government would seek the leading role of the project by acquiring a 51 per cent stake, Xinhua reported.

He made the remarks at an economic forum in April in Kazakstan.

The first section of the project, running 448.8 kilometres from Atyrau to Kenkiyak in Kazakstan, was completed at the end of 2002 and came into operation in March, said the CNPC on its website.

Agreement to strengthen railway transport cooperation

Chinese Minister of Railways Liu Zhijun and Kazakh Minister of Transport and Communication Kazhmurat Nagmanov signed an agreement to strengthen railway transport cooperation at the Great Hall of the People in Beijing.

According to the agreement, China and Kazakhstan will further cooperate in the railway transport sector in the future based on the principle of equality and mutual benefit and in line with the laws of each country and the international treaties joined by the two countries.

The two countries agreed to further develop direct international passenger and freight transport and trans-border transport. Container train transport linking the two countries and at the border will also be promoted.

Both sides will also strengthen research and regulations on the development of railway stations at the border, further improve transport services and freight price system of the trans-border passenger and freight transport, and conduct more cooperation on science and technology in the railway transport sector.

According to the agreement, the Kazakh side will help the Chinese Ministry of Railways set up a branch office in Kazakhstan, since the Kazakh railway sector has set up a branch office in Beijing.

China and Kazakhstan will take turns to host a conference on railway cooperation every year, said the agreement.

China and Kazakhstan started international railway transport through the Alataw Pass at the border on December 1, 1992.

With the joint efforts of both governments and both railway sectors, the total freight transported each year through the Alataw Pass surged 12 times from 570,000 tons in 1993 to 7.52 million tons in 2003. And both sides expected that the figure would go up to 9.2 million tons in 2004.

The Kazakh side plans to start building a railway linking China with Europe. With a total length of 3,083 kilometers, the railway will go across Kazakhstan, which will not only expand Kazakhstan's connections with its neighbors, but also close economic and trade cooperation between China and Kazakhstan.

Kazhmurat Nagmanov briefed the Chinese Ministry of Railways on the railway project during his visit to China last month, and the Chinese side expressed willingness to give full support to it.

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