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. Last Updated: 07/27/2016

Parties to Finalize Deal For Caspian Pipeline

A consortium including Russia and American oil giant Chevron Corp. will sign a long-negotiated deal Friday to build a pipeline to carry Kazakh oil to the Black Sea.

The parties to the Caspian Pipeline Consortium will sign documents restructuring ownership and establishing operating companies in Russia and Kazakhstan, the consortium said in a statement Tuesday.

The $2 billion project remained blocked for years by financial discord between partners, especially Chevron Corp. and the Arab sultanate of Oman.

The consortium -- which includes Russia, Kazakhstan, Oman and private oil companies -- was set up in 1992 to build a pipeline from Kazakhstan's huge Tengiz oil field on the eastern coast of the Caspian Sea to an export terminal near the Russian port of Novorossiisk on the Black Sea.

The route is vital for Kazakhstan and the Western oil firms which have invested in its rich fields to export their product and capitalize on their massive investments.

The Russian and Kazakh governments have already granted the operating companies important tax and customs exemptions.

The pipeline will run 1,500 kilometers (940 miles), skirting the volatile Caucasus region. About half of the pipeline will be new construction, and about half will use existing pipe.

After Friday's signing, Russia will get a 24 percent stake, Kazakhstan will get 19 percent and Chevron the third largest stake at 15 percent.