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Caspian Pipeline Consortium - R&K
The Caspian Pipeline System is the only privately-owned pipeline in Russia. Gulf's involvement with this project began in 2003 and is on-going, making the Caspian Pipeline Expansion Project one of the longest-running projects in the Company's history. This existing 42-inch diameter crude oil transportation system runs 940 miles from the onshore Tengiz oilfield in Kazakhstan, around the northern coast of the Caspian Sea and across southern Russia to an export terminal on the Black Sea near Novorossiysk. The existing pipeline system moves some 500,000 barrels of oil per day ("BPD") and the multi-billion dollar Expansion Project will increase the system capacity to more than 1,000,000 BPD. The expanded system includes multiple new pumping stations, retrofits to existing stations, new pipeline loops, additional oil storage tanks, a new marine pipeline for tanker loading and expansion of the controls and telecommunications systems.
The shareholders of the Caspian Pipeline Consortium ("CPC"), which owns and operates the pipeline system, are Russian, Kazakh and Western companies, 11 entities in total. While the technical demands of the project are significant, the political and cultural aspects present the greater challenge. Gulf's handling of the often competing technical, political and cultural concerns is a large measure of its success and long history with this client. Gulf's approach is attributable to the Company's international project experience and its experience in Russia, where Gulf was one of the first pipeline engineering companies to enter the Russian market after the collapse of the Soviet Union. During the engineering phase of the project, Gulf led an engineering consortium made up of two Russian Design Institutes and one Kazakh Design Institute. Gulf developed the engineering and design basis for the expanded system and coordinated the detail engineering activities of the Design Institutes.Gulf's project management and engineering activity involves review of technical specifications, risk analysis, expert reviews and engineering, preparing the Final Investment Decision package and developing tender documents. With the project now in the construction phase, Gulf continues to provide engineering expertise and has mobilized scores of expatriate and national personnel who are resident in Russia and Kazakhstan, serving as technical specialists to augment CPC's project management team.