Kazakh KazMunaiGas reveals work plan for coming years

Oil&Gas Materials 11 January 2013 19:05

Azerbaijan, Baku, Jan. 11 / Trend E. Kosolapova /

An extended meeting with participation of KazMunaiGas (KMG) Kazakh national oil and gas company and subsidiary organizations was held on Friday to discuss the address of Kazakh President Nursultan Nazarbayev 'Strategy of Kazakhstan-2050: a new policy of the established state', the company's statement said. During the meeting, chairman of the KMG board Lazzat Kiinov spoke on the current strategy of the company until 2022.

He said, under the current strategy, KMG plans to strengthen onshore and offshore exploration in order to increase hydrocarbon reserves, oil and gas production, create a flexible system of oil and gas transportation, increase capacity of refineries and improve the quality of petroleum products as well as create an effective and transparent system of asset management.

"In the next 10 years, the activity of KazMunaiGas's mining companies will be aimed at stabilizing the level of production and the growth of crude oil and gas condensate production from 21.1 million tons in 2011 to 35.4 million tons per year through Tengiz, Kashagan and Karachaganak projects," Kiinov said.

In particular it is assumed that Tengizchevroil must increase oil production to 38.6 million tons - mainly through implementation of the project on future expansion. The share of KazMunaiGas holding 20-percent stake in the project will reach 7.7 million tons.

Production of Kasahgan field will reach 13 million tons per year, including the share of KMG (16.81 percent) at 2.3 million tons. Considering the next stages in development of Kashagan project, in future the oil production will increase to 51 million tons reaching peak oil. In addition, it should be noted that KMG has been appointed Agent for development of 'Kalamkas-sea' field, which shows appreciation of the company's high priority.

Options for the three development phases of Karachaganak field are considered, which envisage an annual stable production of 10.1 million tons of liquid hydrocarbons. As a project participant owning a 10 percent stake, the national company will annually list around one million tons of oil in its performance indicators. In addition, it is planned to expand production capacity and increase gas production.

KMG head went on to say that the company aims to create and develop a modern center for collection, processing and interpretation of geological and geophysical data; introduction of modeling and reservoir management technologies; application of new methods of enhanced oil recovery; developing sour gas field and fields with high gas-oil ratio, and well as deep-water deposits with a high sensitivity of environment and ecology.

"New methods of developing shallow marginally profitable fields will be applied," Kiinov said.
In the refining sector, KazMunaiGas intends to move from raw material supplies to refineries to cooperation in energy processing and exchange of latest technologies.

"Modernization programmes of production processes are carried out on a full scale at Atyrau, Pavlodar and Shymkent refineries," Kiinov said.

It is planned to increase annual processing capacity of the three existing refineries in Kazakhstan from 11.4 million tons in 2011 to 21 million tons by 2022. The depth of oil processing will increase to 90 percent. The quality of motor fuel will comply with Euro-4 and Euro-5 standards.

In this regard, Kiinov instructed all refining units of the company to ensure full control over implementation of projects on refinery modernization to fully provide local market with fuel and lubricants by 2025 in accordance with the new environmental standards, as well as increase the share of national company in the local market of oil products from 18 to 30 percent through assets acquisition and construction of new filling stations under KazMunaiGas brand name.

As for the gas segment, Kiinov noted that the company will mainly focus on several major projects: construction of Beineu-Shymkent-Bozoi pipeline with total capacity of 10 billion cubic meters of gas a year; construction of a 'C' line of Kazakhstan-China gas pipeline with capacity of 25 billion cubic meters per year. At present capacity of the pipeline is 30 billion cubic meters per year due to 'A' and 'B' lines put into operation in 2009 and 2010. Construction of Tobol-Astana-Kokshetau pipeline is planned with capacity of 1.5 billion cubic meters of gas per year and the cost of 213 billion tenge (150.61 tenge = $1)

"The construction of these pipelines will bring gas to 900 residential areas of the republic, including the city of Astana," Kiinov said.

A shipyard plant in Kuryk village, an industrial park in the city of Zhanaozen, a plant on construction of premium connections for oil pipes, as well as a company producing oil and gas equipment will be built in the engineering field under control of KMG in joint cooperation with investors.