A ceremony to mark the beginning of the construction of the Kazakhstan-China gas pipeline, which will become part of an international trunk pipeline system running between China and Turkmenistan, was held near Almaty. The ceremony was attended by Kazakh Energy and Mineral Resources Minister Sauat Mynbayev and Asian Pipeline Director General Beimet Shayakhmetov. The pipeline’s annual handling capacity is 40 billion cubic metres of gas. Initially, 4.5 billion cubic metres of gas will be pumped through the pipeline, annually. The pipeline will be up to full capacity by 2013. Of the entire fuel to be pumped via the pipeline 30 billion cubic metres will go to China each year, and 10 billion cubic metres will be consumed in Kazakhstan. The construction of Kazakhstan’s stretch of the pipeline is to be completed by June 2010. According to early estimates, construction of the Kazakhstan-China gas pipeline will come to USD six billion. Following the pipeline’s construction a contract would be signed with Chinese production companies for the transport of gas from Turkmenistan to China under a “transport or pay” regime in order to minimise the risks of there being the absence of gas in Turkmenistan, which the Chinese could produce. The same risks for Kazakhstan will be next to zero.” The project’s recoupment period will come to 12 or 13 years with funds being raised over a period of 15 years. “There will be no state budget funds in the project, all funds will be loans,” Shayakhmetov said. The project will be implemented in two steps. The first segment of the pipeline will go from the Uzbek-Kazakh border to the Kazakh-China border through Shymkent, the administrative center of the South Kazakhstan region and reach China’s Horgos. It will have an annual capacity of 40 billion cubic metres and a length of 1,300 kilometres. The segment will be built in 2008- 2009. The second segment (Beineu - Bozoi - Kzyl-Orda - Shymkent) will have an annual capacity of 10 billion cubic metres and a length of 1,480 kilometres. It will be built if a feasibility study shows its efficiency. The likely subcontractor for the project on Kazakhstan’s part will be KazStroiServis while CPPE (China Petroleum Pipeline Engineering) will fulfill the Chinese end of the deal. TOO Asia Gas Pipeline was founded in February 2008 on a parity basis between KazTransGaz, a subsidiary of KazMunay- Gas, and Trans-Asia Gas Pipeline Company Limited. The company is based in Almaty. KazTransGaz was established in 2000 to acquire, operate and service trunk gas pipelines in Kazakhstan. The company controls the main network of gas pipelines with an overall length of 11,000 kilometres and an annual capacity of 190 billion cubic metres. The Democratic Party of Kazakhstan Adilet (Justice) has called for the immediate introduction of a law on local self-government in Kazakhstan. “People will not be able to choose their representatives and govern this state without the immediate adoption of a law on local self-government,” Adilet leader Maksut Narikbayev told a press conference early last week.