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  KAZAKHSTAN International Business Magazine №1, 2004
 MunaiTas: a Breakthrough into the 21st Century
MunaiTas: a Breakthrough into the 21st Century
The project to construct an oil pipeline from West Kazakhstan to China is vital to Kazakhstan as an alternative route for the export of hydrocarbons to the Chinese, Asian and Pacific markets.
In September 1997, a General Agreement was made between the Kazakh Ministry of Energy and Natural Resources and the China National Petroleum Corporation (CNPC) on developing hydrocarbon deposits and laying pipelines, including the transcontinental facility West Kazakhstan-China, which will connect Atyrau with the borderline station Alashangkou via Aktyubinsk Oblast.
During December 2001, in pursuance of the framework agreement between the National Company Transport Nefti I Gaza (a recent affiliate of KazMunaiGaz) and CNPC International Kazakhstan, the Northwest Pipeline Company Munai-Tas was founded with the parties’ interest being 51% and 49%, respectively.
The company’s core business includes designing, funding, constructing and operating pipelines. Munai-Tas also offers commercial services, such as pipeline oil transport, oil product marketing both domestically and abroad, and developing new pipeline transport technology.
Munai-Tas distinguished itself by demonstrating the ability to brilliantly manage human, technology, production and financial resources whilst implementing nationally important investment projects. Its track record includes the Kenkiyak-Atyrau oil pipeline, a huge project with fixed capital investments of $202.839 million. Currently, preparations are being made for laying the Zhanazhol-KS13 gas pipeline, and studies are under way for the Atasu-Alashangkou oil pipeline project. This work is being handled by the 157 staff of Munai-Tas, of which 118 people are Kazakhstani specialists.
The company was conferred with the title Best Investor in 2003 in the Production Infrastructure category. The ceremony was held at the 10th Plenary Session of the Presidential Foreign Investors’ Council.
Kenkiyak-Atyrau Oil Pipeline
The first phase of Munai-Tas’ transcontinental programme was the Kenkiyak-Atyrau oil pipeline, which now collects crude from Kenkiyak, Zhanazhol, Laktybai, Makat and other production sites.
In accordance with the Kazakh import substitution programme, the appointment of the general contractor for the project was conditional on the applicant employing domestic companies as subcontractors. As a result, Stroitransgaz of Russia was selected as the general contractor, and 53% of the construction work was subcontracted to KazStroiServis of Kazakhstan.
The project design and follow-up were the responsibility of KazNIIProyekt and NIPI KaspyMunaigaz, both Kazakh project design institutions.
KazTransOil was selected as the single operator of the project, and now this company is in charge of operating and maintaining the most advanced pipeline in Kazakhstan.
The pipeline was built using state-of-the-art equipment and technology - a genuine breakthrough that set the pace for future projects in this sector.
The equipment of SSS Korrosionschutztechnik GmbH&Co.KG, which is a leading German manufacturer of anti-corrosion products, enabled Munai-Tas to install a cathodic protection system on the pipeline for the first time in the CIS. The project almost entirely relied on solar energy due to the use of modern materials and technology supplied by Siemens AG and Shell Solar GmbH. Welding work was performed using Canusa and Rauhem sleeves which allow pipe joints to be insulated in any weather conditions.
All construction work was completed to ISO 9000, ASME B31.4, ASTM 1104, API 5L and DIN standards. Some 80 procedures were applied for detecting and eliminating defects during all construction phases. Quality control was contracted to an independent UK inspector, Moody International Ltd.
The finished facility features total process automation, an international management system and a comprehensive quality assurance system. For example, trunking systems of the MPT1327 standard are used for round-the-clock function monitoring and control in every section of the pipeline. In order to prevent and minimise the adverse environmental impact of accidents, the ÖSD emergency shutdown system was installed. The high reliability of the automatic SCADA control system is ensured by the use of advanced fiber-optic communication lines and specially designed software.
The 448.8-km Kenkiyak-Atyrau pipeline was completed within an amazingly short timeframe of just seven months and commissioned in March 2003. Now it enables oil producers from Aktyubinsk and Atyrau Oblasts of Kazakhstan to access external markets via the Atyrau-Samara export facility.
The minimum guaranteed workload for the pipeline, which totals 81.54 million tonnes of oil, is secured by two contracts with CNPC Aktobemunaigaz (2003-2013) and Kazakhoil-Aktobe (2003-2014).
In addition, according to the Ministry of Energy, an order of 23.82 million tonnes of oil will be supplied in 2003-2015 by other oil producers in the region (Kazakhturkmunai, Kokzhide, Kazakhoil-Emba, Matin, ANAKO, etc.).
Estimation by Munai-Tas itself indicates that the pipeline’s throughput capacity might be increased to 7 million tonnes in 2006 and to 12 million tonnes in 2009.
The extending of the pipeline to the east will contribute to the diversification of Kazakhstan’s pipeline routes.
Zhanazhol-KS13 Gas Pipeline
Another promising activity of Munai-Tas is laying gas pipelines. The first project in this field was the Zhanazhol-KS13 pipeline ordered by CNPC Aktobemunaigaz.
The Zhanazhol-KS13 gas pipeline, with its peak design capacity of 5.2 billion nm3 per annum, is intended to facilitate the export of gas from Zhanazhol and neighbouring deposits and distribution of gas in populated areas along its route. Priming will be performed using gas from the Zhanazhol gas condensate deposit, which is estimated to contain 276 billion nm3 including a gas-cap of 100.5 billion nm3.
The total length of the pipeline from Zhanazhol (240 km south of Aktobe) to the destination point KS13 on the Bukhara-Ural gas pipeline will be 157.7 km. The route was planned so as not to pass any cities, industrial areas, reserves or protected archeological sites.
In order to enhance the safety and quality of construction, a quality management system was introduced which ensures proper application of all design, logistics, building, commissioning and guarantee procedures. All materials and equipment are required to comply with international standards.
Atasu-Alashangkou Oil Pipeline
The Agreement on joint investments in the phased construction of an oil pipeline from West Kazakhstan to China (signed by KazMunaiGaz and CNPC on 3 June 2003) envisages the construction of the Atasu-Alashangkou pipeline section as phase two of the transcontinental programme. According to the schedule, in 2004 the project design will be completed and an expert opinion on the design will be obtained, and in July of that year Munai-Tas will proceed to construction. The Agreement’s intention is to employ as many Kazakhstani subcontractors as possible.
The pipeline (988 km) will pass Karaganda, East Kazakhstan and Almaty Oblasts. Its annual throughput capacity will be 10 million tonnes in 2006-2010 (phase one) 20 million tonnes from 2011 onwards (phase two).
During phase one, oil from the Kumkol deposit will be loaded into the pipeline, as part of long-term obligations of a number of oil producers. In addition, the possibility is being studied of oil barter and direct purchase by CNPC-Aktobemunaigaz from companies in the Turgai region. Another potential source of hydrocarbons is the Tomsk oil-producing region, South Siberia, which is estimated to sustain an annual oil production of 10-15 million tonnes until 2030.
The workload of phase two will be composed of flows from Aktyubinsk, Atyrau and Mangistau Oblasts and the Kumkol deposit - some 20 million tonnes in total annually.
The successful implementation of the planned projects will undoubtedly elevate Munai-Tas to the leading position in Kazakhstan’s energy sector and enable it to rank among the best international pipeline transport companies.

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