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OMAN AND KAZAKHSTAN GOVERNMENTS FORM PIPELINE CONSORTIUM -- AGREEMENT TO PROVIDE EXPORT CAPABILITY FOR KAZAKHSTAN OIL

 OMAN AND KAZAKHSTAN GOVERNMENTS FORM PIPELINE CONSORTIUM --
 AGREEMENT TO PROVIDE EXPORT CAPABILITY FOR KAZAKHSTAN OIL
 MUSCAT, Oman, June 17 /PRNewswire/ -- The governments of the Sultanate of Oman and the Republic of Kazakhstan today announced a joint venture agreement to form a pipeline consortium, which will provide Kazakhstan with an international export capability for its substantial oil reserves, including the Tengiz oil field, which will be developed by the Chevron Corporation.
 The consortium will design, finance, construct, and operate a crude oil pipeline system that will transport petroleum from Tengiz and other locations in western Kazakhstan to present and future deep-water terminal facilities. Possible sites include the Gulf, the Mediterranean Sea, and the Black Sea; final selection will depend on favorable political and economic factors, including the market value of the oil at each terminal.
 The two governments will each share a 50 percent ownership in the consortium, which may be modified as other members are admitted.
 It is expected that this project will take approximately three years to complete and that the pipeline will reach its capacity of some 1.5 million barrels per day within 12 years of start-up.
 Project Cost Estimate US$700 Million to $1.6 Billion
 According to His Excellency Qais Bin Abdul Munim Al-Zawawi, Deputy Prime Minister for Financial and Economic Affairs of Oman, the estimated project costs to construct the crude oil pipeline system range between $700 million and $1.6 billion, depending on the route selected and the extent to which existing facilities can be used, with Oman providing or arranging financing assistance as required by Kazakhstan. Credit support will be provided by Kazakhstan, which will contribute petroleum resources to the consortium. Revenue from the sale of petroleum will be used as partial repayment of the debt incurred to finance the system.
 Oman will provide technical, design, operating, and marketing assistance to the consortium through OOC Ltd., which is owned by the Ministry of Petroleum and Minerals, and is the vehicle for making investments in oil ventures outside of Oman.
 The pipeline could also serve other parties outside of Kazakhstan and also provide petroleum to refining or other processing facilities along the route or at the terminal site.
 Preliminary evaluations have identified eight possible route options. Final selection will depend on detailed engineering studies and negotiations with right-of-way owners.
 The states the pipeline may cross include Russia, Azerbaijan, Georgia, Turkmenistan, Iran, and Turkey. According to His Excellency the Deputy Prime Minister, Oman enjoys good inter-government relations with these states and is willing to use these relationships to obtain the consent of each for construction of the system.
 The Kazakhstan delegation at the signing ceremony in Oman's capital, Muscat, was represented by Prime Minister Sergei Tereshenko and Kadyk Baikenov, Deputy Prime Minister and Minister of Energy and Fuel Resources. The Sultanate of Oman was represented by His Excellency Qais Bin Abdul Munim Al-Zawawi, Deputy Prime Minister for Financial and Economic Affairs and His Excellency Said Bin Ahmed Al Shanfari, Minister of Petroleum and Minerals.
 -0- 6/17/92
 /NOTE TO EDITORS: Hill and Knowlton, Inc., has circulated this material as the international communications counsel for the principal noted above. Hill and Knowlton, Inc. is registered pursuant to 22 U.S.C. 612 with the Department of Justice, where its registration statement and this material are available for inspection. Registration does not indicate approval of this material by the U.S. Government./
 /CONTACT: H.E. Mohammed Nasser Al-Khasibi, Secretary-General Office of the Deputy Prime Minister for Financial and Economic Affairs Muscat, Oman, 968-739 737; Paul Whitelaw (Muscat) Hill and Knowlton, Inc., 968-739 737, or 968-500 600, Room 603; or Andrew Komendantov (New York) Hill and Knowlton, Inc., 212-697-5600, or 212-210-8745 (direct line)/ CO: Sultanate of Oman; Republic of Kazakhstan ST: Sultanate of Oman IN: SU:


SH -- NY016 -- 0962 06/17/92 09:36 EDT
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Publication:PR Newswire
Date:Jun 17, 1992
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