Kazakhstan Is Due To Adopt A New Law 'On The Main Pipeline'

In keeping with GRATA Law Firm's policy of keeping clients informed of important legal developments that may affect their business, we would like to draw your attention to recent changes in Kazakh legislation in connection with the adoption of the new draft law entitled "On the Main Pipeline".

1. Overview

   The Ministry of Oil and Gas of Kazakhstan has developed a draft law entitled "On the Main Pipeline" ("Bill"), the main provisions of which are discussed in this review. At this stage the Bill is preliminary and may be subject to further changes. In September 2011 the Bill was submitted to the Office of the Prime Minister of the Republic of Kazakhstan.

   The Bill represents an innovation development in the legislation of Kazakhstan. At present, the status of pipelines is subject to the following legal acts: the Law of the RK "On Subsoil and Subsoil Use" dated June 24, 2010, the Law of RK "On Architecture, Town Planning and Construction Activities" of July 16, 2001, the Law of RK "On Transport in the RK" of September 21, 1994, the Environmental Code of January 9, 2007 and other legislation. The Bill incorporates all this previous legislation.

   The Bill aims to regulate social relations in the establishment and operation of the pipeline, namely the trunk pipeline, oil pipelines, as well as regulating the actual establishment and operation of the pipeline to a greater extent than was the case under previous legislation.

   The Bill introduces the following innovations: the bank of product quality, the national operator, the operator, operator services, maintenance control, technical corridor, technical diagnostics and exchange operations (swap).

2. Land Needed for the Pipeline

   Under the Bill, the main pipeline is an indivisible property complex and may be in public or private ownership. It will be prohibited for a pipeline to be owned by individuals or by legal entities registered in accordance with the laws of a foreign state.

   The Bill specifies that the main line consists of a linear part and the following objects: devices, equipment, structures, buildings and other structures associated with the land. The linear part of the pipeline is a chattel. Structures, buildings and plants closely connected with the land that form part of the pipeline facilities are real property.

   The Bill also regulates issues relating to the status of the land required for the functioning of the pipeline, introducing, among other things, buffer zones for the main pipeline...