BAKU, Azerbaijan, June 6. The gas industry of Kazakhstan may face a crisis in 2024, Chairman of the Management Board of QazaqGaz JSC Sanzhar Zharkeshov said at a government hour in Kazakh Parliament, Trend reports.
“The crisis will begin as early as 2023 if all consumer requests are satisfied. First, a gas shortage is predicted from 2024. The needs of the local market will exceed available gas resources by 1.7 billion cubic meters. Gas exports will cease in 2023 if urgent measures are not taken," he said.
According to him, the deficit is associated with a large volume of applications from new large consumers, including projects to convert combined heat and power (CHP) plants to gas (CHP-2 and CHP-3 plants in Kazakhstan’s Almaty city), connect new gas chemical complexes (United Chemical Company, WestGasOil and others) to gas supply and new large commercial consumers.
“Secondly, the financial stability of QazaqGas is expected to worsen in 2022 due to the unprofitability of the local market,” he added.
"QazaqGas managed to compensate for local market losses of 162 billion tenge ($375 million) through transportation and export revenues in 2021. However, gross profit is projected to decrease to 62 billion tenge ($143 million) in 2022, as local market losses will amount to 176 billion tenge ($407 million), and revenues will fall due to the reduction in export volumes. Urgent measures are needed," Zharkeshov said.
He announced urgent measures to expand the resource base of commercial gas in the period from 2022 through 2030. The available resource is 25.6 billion cubic meters by 2022, taking into account the volume of Tengizchevroil LLP [joint venture between Chevron, ExxonMobil, KazMunayGas and LukArco], which must be redirected from export to the local market in the amount of 1.7 billion cubic meters.
According to Zharkeshov, there is still no understanding with Tengizchevroil LLP, they are focused on export gas supplies, while the country needs additional volumes for the local market.
“The most developed gas fields in the amount of 200 million cubic meters come out from 2023, such as Urikhtau, Pridorozhnoye, Rozhkovskoye and so on, and production volumes will increase to 1.7 billion cubic meters by 2027.
Kashagan Gas Processing Plant with a capacity of 1 billion cubic meters will give 0.7 billion cubic meters of commercial gas by 2024. It is planned to reduce the re-injection of gas at Tengiz and Karachaganak fields starting from 2026, as a result of which it is planned to increase free resources by 5 billion cubic meters," the chairman said.
According to him, it is planned to expand the volume of gas production at the Kashagan plant by an additional 2 billion cubic meters in 2026 and additionally another 6 billion cubic meters by 2029.
Zharkeshov also added that the projected production volumes from the geological exploration of QazaqGaz may reach 1 billion cubic meters by 2029.