Caspian Pipeline Consortium not to tap loan facility yet, but use own resources
ATYRAU. April 12 (Interfax) - The Caspian Pipeline Consortium (CPC) has no plans to tap a $500-million credit facility raised from a syndicate of international banks to finance the expansion project of the pipeline system.
"Those are reserve funds that will not be used any time soon," CPC General Director Nikolai Brunich told Interfax.
The loan funds were needed as a backup, "as CPC had to have large working capital according to some equipment component lists." "But since the tariff program has been revised, the internal current assets turned to be sufficient to meet the scheduled scope of work," said the head of CPC.
The CPC in January signed a deal with a syndicate of international banks to borrow up to $500 million. The loan will be repayable at LIBOR for six-month loans in US dollars + 2.65% in up to five years and is intended for the pipeline expansion project.
The loan falls within the CPC's $5.4-billion expansion budget, backed by the company's own revenue, said Nikolai Platonov, the consortium's general director, and will be treated as a standby source of finance of the consortium's own funds prove insufficient.
The expansion project includes rehabilitation of 5 existing and construction of 10 additional pump stations (two in Kazakhstan and eight in Russia), six crude oil storage tanks near Novorossiysk and a single-point mooring qt the CPC Marine Terminal, and also the replacement of a 88-km pipeline section in Kazakhstan with a larger diameter pipe. Pipeline throughput capacity will be increased steadily to 67 million tonnes.
CPC owns the 1,511-km Tengiz-Novorossiysk oil pipeline, which connects deposits in Western Kazakhstan with the Russian Black Sea coast. The terminal at Novorossiysk loaded 32 million tonnes of oil in 2011.
CPC Shareholders are the Russian Federation, represented by Transneft - 24% and CPC Company - 7 %); the Republic of Kazakhstan represented by KazMunayGas - 19% and Kazakhstan Pipeline Ventures LLC - 1.75%;, Chevron Caspian Pipeline Consortium Company - 15%, LukArco B.V. - 12.5%, Mobil Caspian Pipeline Company - 7.5%, Rosneft-Shell Caspian Ventures Limited - 7.5%, BG Overseas Holding Limited - 2%, Eni International N.A. N.V. - 2%, and Oryx Caspian Pipeline LLC - 1.75%.