Kazakhstan's CPC Blend loadings hampered by facility damage: operator

Kazakhstan's CPC Blend crude oil is being loaded from just one of three single-point mooring systems at the Russian port of Novorossiisk after cracks were discovered in subsea equipment, the operator of the facility, which typically handles 1.4 million b/d, said Aug. 22.

The Caspian Pipeline Consortium did not specify the size of the reduction, the latest in a series of issues that have raised uncertainty over CPC Blend crude supply.

"The use of the single SPM will allow to meet shipper nominations with reduced volumes," CPC said on its website.

The single-point mooring systems normally have significant spare capacity, meaning it is possible to continue substantial loadings from just one facility.

Meanwhile, Kazakh upstream production was already below normal due to an issue with the Kashagan field and maintenance at the Tengiz field.

The operator of the Tengiz field, Chevron-led Tengizchevroil (TCO), said it was "aware of temporary maintenance activities at the Caspian Pipeline Consortium".

"Currently TCO's production and export of crude oil via the CPC pipeline continues uninterrupted," TCO said in an emailed comment.

CPC said the issue stemmed from cracks discovered in buoyancy tanks used to hold in position subsea hoses beneath two of the single-point mooring systems, which had been reported to shareholders on Aug. 5 and Aug. 17, respectively.

No spillage had occurred as a result of the defects, CPC added. It said the decision to suspend loading from the two SPMs followed advice from their manufacturer and the American Bureau of Shipping classification organization.

"These entities strongly recommended that the operation of the SPMs should be suspended until the buoyancy tanks were replaced," CPC said, adding the replacement tanks would be sourced from inventory and a contracting process was underway.

"CPC is going to advise how the situation develops at a later date," it said.

The consortium linked the defects to the "abnormal" storms that were found to have damaged the SPMs in March 2022, causing a temporary shutdown of loadings.

The storm damage caused a complete halt to loadings of the relatively light sweet grade for several days in March followed by a resumption of loadings from one SPM, and then a return to normal volumes a month after the original shutdown.

Later uncertainties surrounding the facility are thought to have had little or no impact on loading plans. These include subsea survey work in June to detect and remove World War II munitions, and a court order in July that briefly threatened to halt loadings before being overturned by a higher court.

Kashagan reduction

Kazakhstan relies on the 1,500 km CPC pipeline across southern Russia to Novorossiisk as its main outlet to world markets for crude exports.

However, upstream in Kazakhstan production has been reduced due to maintenance at one of the plants at the Tengiz field due to last into September, and an investigation into a gas leak from facilities at the Kashagan field.

Kashagan, the country's second-highest producing field, was producing at reduced levels of around 100,000 b/d pending the results of the investigation into possible pipe corrosion, officials have said.

CPC Blend is not subject to US sanctions against Russia, even though it loads in Russia, reflecting the mainly Kazakh origin of the crude.

It was assessed by Platts, part of S&P Global Commodity Insights, at a $3.25/b discount to Dated Brent on Aug. 19.