Via Stratfor (subscription required), interesting analysis of the broader regional implications of the recently completed pipeline between China and Kazakhstan, particularly for Russia.  As the article notes:

“…Kazakhstan has finished constructing the final segment of a strategically important oil pipeline running from the Caspian Sea to western China, according to a July 1 announcement from KazStroyService, the company in charge of the project. The pipeline segment runs between the Kazakh cities of Kenkiyak and Kumkol and is approximately one-fourth of a pipeline whose total length is about 1,860 miles. The completed line will transport approximately 200,000 barrels per day (bpd) to China initially; by 2011, it could transport more than twice that amount and further in the future expand to carry even more.

The pipeline is a strategic piece of infrastructure for energy-rich Kazakhstan, which has been looking for markets for its resources, and for China, which has seemingly endless energy needs. However, other countries in the region — including Russia — will be less than pleased with the pipeline’s completion and the growing energy ties between Astana and Beijing.

Kazakhstan emerged from the wreckage of the Soviet Union in the early 1990s with a faltering domestic economy and financial stress, but with natural resources so abundant that Soviet production barely scratched the surface. At the same time, China was rapidly growing into an economic behemoth with a voracious appetite for energy. Beijing began looking for energy supplies whose transport did not rely on overseas routes subject to disruptions like Middle Eastern wars, African sabotage and violence, or the implicit threat of U.S. naval interdiction.

The solution for the two states, and their state-run energy companies, was to link Kazakhstan’s energy deposits with China’s markets. The problem was simply one of transport, and the two agreed in 1997 to piece together a pipeline using new construction and bits and pieces of Soviet pipeline infrastructure. The China-Kazakhstan oil pipeline was born in concept, but would take several years to develop into a functioning line. In December 2005, the long strip from Atasu, Kazakhstan, into western China was completed; all that remained was the Kenkiyak-Kumkol branch, which was declared finished and successfully tested on July 1.

The pipeline’s completion is a big step for China. Beijing has continued to pursue strategic investments and acquisitions to enhance its energy security throughout the years, and the completion of this pipeline is a long-awaited taste of the fruits of this strategy. Beijing will not only get its hands on the vast petroleum riches to be unearthed from Kazakhstan’s Caspian basin, but will also gain a means of importing oil from other Kazakh sources that can be linked up to the line, including an array of secondary fields developed during Soviet times that are not yet exhausted and have received Chinese attention. Crucially, this is a land-based shipment route that bypasses the problems associated with China’s other supply lines.

The pipeline is also a big step for Kazakhstan. Jammed between Russia, its former and potentially future overlord, and China, a promising potential market for Kazakh resources, Kazakhstan has attempted to strike a balance in order to maximize its freedom of movement and bargaining potential as the leading Central Asian power (and not a servant to the continent’s geopolitical giants). China has provided the investment necessary to develop the underground resources and transport infrastructure needed for Kazakhstan’s economic strategy and viability as a more or less independent state — and Chinese deals often come with reliable cash rather than the shifting political demands of the Kremlin.

The energy rapport between Beijing and Astana will irritate several neighbors. China is a bottomless pit for energy consumption as its energy-intensive manufacturing economy surges ahead. Other pipeline transit states that would like to ship Kazakh crude — such as Azerbaijan, Georgia and Turkey (which operate the Baku-Tbilisi-Ceyhan pipeline) and especially Russia (which has its own links to Kazakhstan’s oil via the Caspian Pipeline Consortium [CPC] pipeline) — will see a direct line transporting Kazakh oil to China as unwanted competition and a drain of supplies. Currently, Kazakhstan ships most of its crude to the west and north — around 1.7 million bpd, though that could grow to 2.3 million bpd when planned CPC upgrades are completed. This is far greater than the 200,000 bpd going to China. But with a route to China secure, Kazakhstan will be able to increase exports over time to meet China’s rapidly growing energy demand. And because the route to China transits fewer states than other pipelines and avoids a number of geopolitical quagmires, it might be the simpler and more attractive option for Astana. Over time, more Kazakh crude could be diverted away from the pre-existing trans-Caucasian or Russian routes, to the chagrin of those transit states.

In a geopolitical sense, Moscow will also not be happy to see Kazakhstan — a former Soviet Union country vital to Russia’s own energy plans — cozy up to its powerful neighbor to the south. The Kremlin remains the top economic, cultural and military power in the former Soviet states, and its security forces range far and wide within the Central Asian system, so there is not yet a risk of China actually stealing Kazakhstan out from under Russia’s nose. But at the same time, the evolving rivalry between Russia and China over vital interests in the Central Asian region is nowhere clearer than in the completion of the pipeline between China and Kazakhstan.”