Kazakhstan to make decision on financing Tengiz Growth project in 2015

Baku, Azerbaijan, Feb.23

By Elena Kosolapova - Trend:

The final decision on financing of the Future Growth project at the Tengiz oil field in Kazakhstan is expected until the end of 2015, Kazakh Energy Minister Vladimir Shkolnik said.

He made such a statement at the briefing in the Central Communication Service on Feb. 23, Novosti-Kazakhstan reported.

Shkolnik noted that the project will allow increasing the annual oil production at Tengiz from current 26.5 million metric tons to 38.6 million metric tons.

A new oil collection system at the wells, high pressure facilities and infrastructure and support objects will be build within the project.

Moreover the project envisages construction of a new oil refinery with the capacity of 12 million metric tons per year and gas reinjection facilities with the capacity of 9.4 billion cubic meters per year, the minister said.

In addition, Wellhead Pressure Management project is planned to be implemented within the Future Growth Project.

"It is very important for future efficient operation at the Tengiz field. Tengiz reservoir pressure is falling. This can greatly complicate the extraction of oil and sharply increase the cost of production," Shkolnik said.

Shkolnik said that a draft design of the Wellhead Pressure Management Project was developed in November 2014. Tengizchevroil, which develops the field, presented the trial budget and schedule of the project basing on the draft design.

The design cost of the project is expected to reach $38 billion including $14 billion for growth project facilities, $22.4 billion for Wellhead Pressure Management facilities and $ 1.9 billion for drilling and site preparation.

"We are discussing the measures which could reduce the expenses and optimize the cost of the project with our partners," the minister said.

Tengiz is located on the 2,500 square kilometer (1,600 square mile) project license area which includes the giant Tengiz field, and a smaller but sizable Korolev field and several exploratory prospects.

The Tengiz and Korolev fields have potential for an estimated 750 million to 1.1 billion metric tons (6 billion to 9 billion barrels) of recoverable oil. Estimated original oil in place in the drilled and un-drilled portions of Tengiz field is about 3 billion metric tons (26 billion barrels). At a world class size of 190 million metric tons (1.5 billion barrels), Korolev is one-sixth the size of Tengiz.

Tengiz field is one of the world's deepest developed giant oil fields, with the top of the reservoir at about 4,000 meters (13,000 feet).

Tengiz reservoir is 19 kilometers (12 miles) wide by 21 kilometers (13 miles) long. The oil column measures an incredible one mile thick.

Tengizchevroil was formed between the Republic of Kazakhstan and Chevron Corporation in 1993 to explore and develop Tengiz oilfield. The shareholders of Tengizchevroil are KazMunaiGas national oil and gas company of Kazakhstan (20 percent), Chevron Overseas (50 percent), ExxonMobil (25 percent) and LukArko (five percent).

Edited by S.I.

Follow the author on Twitter: @E_Kosolapova

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