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China National Petroleum Corp (CNPC) will spend $5 billion to buy 8.33 percent of a Kazakh offshore oilfield in the Caspian Sea.

The oilfield has estimated 35 billion barrels of oil along with natural gas.

Daily production of the Kazakh oilfield could reach a maximum of 1.5 million barrels per day through future development.

The purchase agreement was signed by heads of Kazakhstan’s national oil and gas producer KazMunaiGas and China’s state-owned oil giant CNPC in the presence of Kazakhstan President Nursultan Nazarbayev and Chinese President Xi Jinping during his tour to the Central Asian country.

In addition to the $5 billion deal, CNPC will also pay $3 billion to cover half of the investment in the second phase of Kazakh oilfield’s development, KazMunaiGas head Sauat Mynbayev said.

China want to lift 20 million tons of crude oil annually from Kazakhstan.

Nazarbayev and Xi also attended the opening ceremony of one of the China-Kazakhstan natural gas pipelines.

The two countries set up a joint venture in 2008 to build pipelines.

Two gas pipelines have started operating with annual transport capacity of 30 billion cubic meters.

The third one is expected to be ready by the end of this year, capably of carrying 25 billion cubic meters of gas annually.

Source: Reuters, CPCIA (国家石油和化工网)