Oil pipeline

Zhaikmunai has a pipeline to transport crude oil from the Chinarevskoye field to a railway terminal nearby the city of Rostoshi.

The pipeline and loading terminal were successfully completed in 2008 and have been fully operational since January 2009. The oil pipeline has a maximum annual throughput capacity of 3 million tonnes. The rail loading terminal receives all crude oil and condensate produced by Zhaikmunai and has a capacity of approximately 4 million tonnes of crude oil and condensate per year. The combined cost for the oil pipeline and rail loading terminal amounted to approximately US$97.0 million but management estimates that the oil pipeline has reduced the cost of transporting crude oil from the Chinarevskoye Field to the Rostoshi rail loading terminal by approximately US$25.0 per tonne.

By transporting oil production by rail, Zhaikmunai does not encounter any dilution of the quality of its crude oil as it would if it was transported by pipeline and mixed with oil from other sources, and is therefore able to obtain a higher price for its production in the export market.

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