Tengizchevroil produces liquefied petroleum gas (LPG), dry gas and sulfur in addition to crude oil.
TCO has established a long-term, diverse and capable customer base which support reliable product off take under term sales agreements.
TCO sells LPG to Kazakhstan and to export markets using rail and seaborne deliveries. Export sales are based on Incoterms 2000, typically as delivered at frontier (DAF) or free on board (FOB) sales to TCO's pre-qualified customers.
TCO sells LPG inside Kazakhstan. Sales are made using a monthly request for proposals (a tender process). TCO delivers LPG to end destinations of Kazakhstani customers to ensure that TCO meets its product stewardship commitments. TCO's tender is open to all customers which meet TCO's pre-qualification criteria.
TCO tender award criteria include, but are not limited to, the following considerations:
TCO sells LPG by
Rail Transportation: TCO leases a fleet of LPG rail tank cars to transport all production safely and reliably. TCO obtains rail plans through freight forwarders for shipments from Kulsary to end destinations.
Seaborne Transportation: Term sales customers typically lift LPG on vessels that customers own or charter. The vessels must meet TCO requirements and the marine terminal from which the lifting is made. Most spot sales customers also own or charter vessels. TCO may charter vessels for delivered sales to some spot customers.
TCO sells LPG based on market prices using LPG price quotations published by Argus and/or Platts which are leading global providers of energy industry information and price assessments. When negotiating LPG prices, TCO considers the competitive environment in each market place.
TCO assesses all potential customers from commercial, financial, logistical, and technical perspectives. All potential customers must meet TCO's requirements under its business review process. TCO gives strong preference to establishing commercial business relationships with end users. All potential customers must demonstrate organizational capability and meet these criteria:
TCO prefers to sell dry gas under medium and long-term contracts to customers who are consumers of dry gas in their owned-facilities or owners of distribution pipeline systems which they use to deliver dry gas to retail consumers.
TCO delivers dry gas to customers in domestic and export markets by shipping through pipelines. Domestic and export sales are based on Incoterms 2000. Domestic sales are made "free carrier" (FCA) and export sales are made "delivered at frontier" (DAF) to TCO's pre-qualified customers.
In the Kazakhstan market, TCO supplies dry gas to Atyrau oblast.
TCO plans to continue to use long-term sales agreements for both export and domestic sales. TCO focuses on maintaining access to current markets and also diversifying to new markets.
TCO assesses all potential customers from commercial, financial, and technical perspectives. All potential customers must meet TCO's requirements under its business review process. TCO gives strong preference to establishing commercial business relationships with end users who consume dry gas in their facilities or own pipeline distribution networks used to deliver dry gas to retail customers. All potential customers must demonstrate organizational capability to qualify as TCO customers.
TCO needs to understand the participants in the full sales chain from TCO through intermediate marketing support companies, if required by end users, to the end users that consume TCO sulfur in order to meet TCO business review requirements. The TCO business review process is an integral element of the sulfur sales strategy. The TCO Sulfur Sales Questionnaire and Business Questionnaire are required to be filled out as a part of business review process.