29 Sep 2022 16:25

Kazakhstan plans to introduce gas price formula pegged to export netback on domestic market

ALMATY. Sept 29 (Interfax) - Kazakhstan is planning to introduce a price formula for gas sales pegged to export netback on the domestic market, Sanzhar Zharkeshov, QazaqGaz management board chairman, told journalists on the sidelines of the Kazakhstan International Oil and Gas Exhibition and Conference.

Annual domestic consumption of gas in Kazakhstan is set to increase to 38 billion cubic meters by 2030 from 21 bcm, Zharkeshov said. "It is therefore necessary to provide for this consumption. This can be done either by increasing production or through imports," he said.

The country produces about 55 bcm of natural gas per year, but 50% is injected back underground, and only half of that volume becomes commercial gas, Zharkeshov said. So the point is not to increase production, but to reduce injection and increase processing, he said.

The country's efforts will initially be aimed at ensuring domestic consumption and then at fulfilling the contract with China's CNPC, "because we want to remain a reliable partner to them and continue to export," Zharkeshov said.