Kazakhstan's Kashagan development may be delayed due to high costs of gas processing project

ASTANA. Aug 7 (Interfax) - Kazakhstan's Kashagan development project may be delayed or suspended due to high costs for the construction of new facilities, according to the National Development Plan to 2029, approved by a presidential decree dated July 30, 2024.

"Large investments, including for the construction of new facilities, may pose a risk of a delay or suspension of the Kashagan development project," the document says.

"The planned expansion projects at Tengiz (Future Growth Project, Wellhead Pressure Management Project) and Karachaganak (Gas Reinjection) are not associated with high risks," the National Development Plan reads.

According to the document, the central government of Kazakhstan will focus until 2029 on reducing the risks associated with the expansion and gas processing projects in the three largest oil and gas fields: Kashagan, Karachaganak and Tengiz.

North Caspian Operating Company (NCOC), the operator of the Kashagan project, is now building a gas processing plant (GPP) with a capacity of 1 billion cubic meters a year. In addition, NCOC plans to put into operation a 4 bcm GPP by 2028 and a 2.5 bcm GPP by 2030.

Kashagan is Kazakhstan's first offshore oil and gas field in the Caspian Sea. It is the largest international investment project in the country. Commercial operation at Kashagan began on November 1, 2016. The recoverable oil reserves of the Kashagan field are estimated to range between 9 and 13 billion barrels. Commercial operation at Kashagan began on November 1, 2016. In 2022 the Kashagan project produced 12.7 million tonnes of oil, rising to 18.8 million tonnes in 2018.

North Caspian Operating Company (NCOC), the operator of the Kashagan project, is owned by KMG Kashagan B.V. (16.877%), Shell (SPB: RDS.A) Kazakhstan Development B.V. (16.807%), Total EP Kazakhstan (16.807%), Agip Caspian Sea B.V. (16.807%), ExxonMobil Kazakhstan Inc. (16.807%), CNPC Kazakhstan B.V. (8.333%), and Inpex North Caspian Sea Ltd. (7.563%).