Kazakhstan, Tengizchevroil shareholders agree on distribution of associated gas

Oil&Gas Materials 23 December 2013 18:17 (UTC +04:00)

Astana, Kazakhstan, Dec.23
By Daniyar Mukhtarov - Trend:

Kazakh government and Tengizchevroil shareholders (TCO) have agreed on how seven billion cubic meters of gas from the Tengiz field intended for the Atyrau gas chemical complex, will be distributed, TCO representative told Trend on Dec.23.

"It is seven billion cubic meters of associated gas to be sent to the United Chemical Company LLP. About 2 billion cubic meters of it will be processed to extract ethane, propane and butane fractions. The remaining part will go back to Tengizchevroil for its own needs: part of the gas will go to generating electricity in domestic TCO facilities, and part - for sale on the domestic market of Kazakhstan, "an informed source said.

As reported earlier, the gas of the Tengiz field will be used at the first stage, following this, gas condensate from Karachaganak will be used as a raw material and gas form Kashagan in completion of the complex's first phase.

The construction of the first integrated gas-chemical complex with total designed capacity of 1.25 million tons of polyethylene and propylene per year has already started in Atyrau province.

A construction area was prepared and the construction of a number of facilities began. But the main work will begin after the financing issue which is issued through Kazakhstan's Development Bank is solved. Chinese Eximbank (Export-Import Bank) will provide loans. It will be possible to talk about large-scale works after the financing is provided.

Work on the construction of the complex, the cost of which is estimated at $ 6.3 billion, is carried out by Kazakhstan Petrochemical Industries Ltd Company. The complex is being built near the Bolashak plant where it is supposed to refine the oil of the Kashagan offshore field.

Part of the gas produced as a result of oil refining should serve as a starting material for the new complex.

The construction of the first gas chemical complex, given its high project cost, will be divided into two phases.

The implementation of the first phase costing about two billion dollars, which should be completed in 2014, involves the commissioning of the line for production of polypropylene with capacity of about 500,000 tons per year.

Translated by M.L.

Edited by C.N.