China's biggest oil producer has signed a deal with Kazakhstan's state oil firm on the final phase of a cross-border pipeline.

By staff reporter Chen Zhu

(BOCVIP.COM) China National Petroleum Corp., the parent of PetroChina, said it has signed a framework agreement with Kazakhstan's state oil firm KazMunaiGaz on the joint development of the Urikhtau natural gas field.

CNPC made the announcement in a statement on its Web site on Oct. 15. It did not provide further details.

Urikhtau, located in the south of Kazakhstan, has estimated reserves of 40 billion cubic meters, the Shanghai Cooperation Organization said on its Web site.

The two parties also signed a framework deal on the construction of section II of phase II of the China-Kazakhstan crude oil pipeline, CNPC said.

The second, final stage of phase II will extend the pipeline to 2,800 kilometers and double the annual capacity to 20 million tons, Zhu Baoli, manager of China National Oil and Gas Exploration and Development Corp.'s pipeline operations, told an industry forum in Beijing on Sept. 23. The first stage of phase II was completed with the opening of a 792-km addition to the pipeline on July 11, Zhu said.

He did not say when the second stage would be completed.

Zhu said the pipeline had not been operating at a full capacity due to delays at CNPC's Dushanzi refinery in northwest China's Xinjiang autonomous region.

The first phase of the China-Kazakhstan pipeline opened in December 2005. The pipeline, a joint venture of CNPC and KazMunaiGas, is China's first international oil pipeline project. It runs from Atyrau in western Kazakhstan to Alashankou in northwest China.

Chinese oil companies own stakes in several Kazakhstan oil producers' operating fields along the pipeline's route.

As a member of the SCO, a mutual security forum for Central Asian states, Beijing has extended loans to several countries in the region, including the provision of US$10 billion to countries hit by the global economic crisis.

PetroChina closed up 1.05 percent at 13.45 yuan on Oct. 15 in Shanghai. In late afternoon trading, it was up 1.61 percent at HK$10.12 in Hong Kong.

1 yuan = 14 U.S. cents

Full article in Chinese: http://www.bocvip.com/2009-10-15/110283172.html