Third stage of Karachaganak project still pending
ASTANA. April 29 (Interfax) - The Kazakh government is not yet giving the go-ahead for the third stage of the Karachaganak project.
"As far as the third stage is concerned, the Oil and Gas Ministry and the government's Council for Oil and Gas have come to the conclusion that it is too early to embark on the third stage of the project," the CEO of KazMunayGas Lyazzat Kiinov told a Monday press conference at the State Office of Press Relations.
The Karachaganak project is split into four stages, with the third stage projected to increase liquid hydrocarbon production to 15 million tonnes a year and gas output to 38 billion cubic meters (bcm) a year.
The operating company, Karachaganak Petroleum Operating BV (KPO), completed the first two phases of development as specified in the Final Production Sharing Agreement (FPSA).
The second stage involved investment to enhance existing facilities, the construction of new gas and liquid processing and gas injection facilities, the work-over of more than 100 wells, the construction of a 120-megawatt (MW) power station and the laying of a new 650-kilometer pipeline to connect the field to the Caspian Pipeline Consortium (CPC) system at Atyrau. Construction work commenced in 1999 and was completed in 2003.
As reported, KPO was going to present the third stage of the project after resolving disputes with Kazakhstan.
In December 2011, KPO stakeholders and the Kazakh government signed a settlement agreement, in accordance with which Kazakhstan acquired a 10% stake in the Karachaganak project.
KPO's current ownership structure is as follows: BG Group holds a 29.25% stake, Eni 29.25%, Chevron 18%, Lukoil 13.5% and KazMunayGas 10%.
KPO has been developing the Karachaganak field since 1997 on the basis of a 40-year production sharing agreement. The Karachaganak oil and gas condensate field is one of the largest in the world, with reserves estimated at 1.2 billion tonnes of oil and 1.34 trillion cubic meters of gas.
