"The tender winner will be a bank that will offer the least percentage," he noted. He said the project would cost $700 million and would be equally financed by the "Kazakh and Chinese sides", with the "Chinese side acting as the underwriter".
According to Shkolnik, "Kazakhstan's contractors will do 70 per cent of the construction, and China's, 30 per cent". "The pipeline will increase Kazakhstan's transit attractiveness, since Russian oil, too, is expected to be shipped to China," he noted.
Russia's Energy and Industry Minister Viktor Khristenko had earlier said that Russia's use of the Kazakhstan-China pipeline "will largely depend on the conditions of its exploitation".
A ceremony was held on Tuesday in the Karaganda region of Kazakhstan to mark the official start of the construction. This is the first export oil pipeline that will enable Kazakhstan to supply hydrocarbons to external markets detouring Russia.
Under the project, the pipeline will be laid from the oil-pumping station of Atasu in the Karaganda region to railway station Alashankou in China. According to preliminary technical and economic characteristics, it will be 988 kilometres long and have a pipe diameter of 813 millimeters. Its throughput capacity in the initial stage will be 10 million tons a year, and at the second stage, up to 20 million tons. The pipeline is expected to be finished in mid-December of 2005 and go online in 2006.
With the pipeline on stream, the Chinese side will be receiving oil from the Caspian region of Kazakhstan.
