ASTANA, Kazakhstan, December 25. Kazakhstan ends this year with significant achievements in its oil and gas sector.
Trend News Agency provides an overview of the main events in the oil and gas sector of Kazakhstan in 2023:
Oil and gas
At the beginning of this year, it was noted that Kazakhstan is ready to supply oil to Germany, with the start of the operation being subject to the availability of written consent from Russia for the use of the “Druzhba” pipeline for transit. In addition to this, KazTransOil, Kazakhstan's national oil transportation company, revealed its plans to export 300,000 tons of oil in 1Q2023 to Germany via the "Transneft" JSC main oil pipelines in the direction of the "Adamova Zastava" delivery point. On February 28, KazTransOil supplied the first 20,000 tons of oil intended for export to Germany to the system of the Transneft, with further delivery to Germany via the "Druzhba" pipeline.
On July 5, the Caspian Pipeline Consortium (CPC) resumed the oil intake from shippers at oil pumping stations in Kazakhstan after the stabilization of the energy supply. In addition, as Caspian Pipeline Consortium General Director Nikolay Gorban said, CPC plans to pump 18 million tons of oil from the Kashagan field in 2023 and 2024. The Caspian Pipeline Consortium announced that it has already achieved mechanical readiness to pump increased volumes of oil from Kazakhstan.
Kazakhstan has agreed to cut its oil production by an additional 82,000 b/d. Thus, OPEC+ oil producers reached a consensus on implementing voluntary production cuts nearing 2 mb/d at the beginning of next year, with Saudi Arabia maintaining its existing voluntary cut. At the same time, previously, OPEC predicted liquids supply in Kazakhstan would grow by 0.1 mb/d to an average of 1.9 mb/d in 2023. Looking ahead to 2024, the forecast anticipates a growth of about 80,000 b/d in liquids supply, averaging 2 mb/d.
Oil and gas projects (fields, pipes, and plants)
On July 1, Prime Minister of Kazakhstan Alikhan Smailov announced that the construction of a new gas processing plant with a capacity of 900 million cubic meters in Kazakhstan's Zhanaozen will begin in the autumn.
Kazakhstan's QazaqGaz (national gas company) launched a new gas field, Anabay, in the Moyynkum district of the Jambyl region. Exploration and production QazaqGaz LLP developed the field, reactivated three drilled wells, and also built the Anabay-Zharkum gas pipeline. At the moment, all construction and installation work has been completed. It is expected that in 2023 gas production at the field will be 6.5 million cubic meters, and in 2028 the production level will reach 44 million cubic meters. Gas volumes from the Anabay field will be used to meet the needs of the domestic market.
Moreover, the operator of the North Caspian Sea Project, North Caspian Operating Company N.V. (NCOC), has started construction of a gas pipeline from Bolashak Oil Processing Facility (OPF) to the planned third-party gas processing plant. NCOC has begun construction of the gas pipeline as part of the implementation of its obligations under the project to transfer 1 billion cubic meters of gas per year. The length of the gas pipeline laid from the Bolashak OPF to a third-party gas processing plant will be about 15 km.
On October 24, the supply of gas through the second string of the Beyneu-Zhanaozen main gas pipeline with a length of 308 km in the Mangistau region was launched. The construction of this gas pipeline was carried out within the framework of the Comprehensive Plan for the Social and Economic Development of the Region for 2021–2025.
Moreover, Kazakhstan will implement large oil and gas projects in the Tengiz, Karachaganak, and Kashagan fields, aimed at increasing oil production to 105.5 million tons and gas production to 82.1 billion cubic meters by 2027. These initiatives are outlined in Kazakhstan's government-approved Comprehensive Plan for the Development of the Largest Oil and Gas and Petrochemical Projects for 2023–2027. The Comprehensive Plan aims to implement 20 major projects in the oil and gas industry, oil and gas refining, and petrochemicals. The total amount of investment projected is $37.3 billion.
At the same time, Kazakhstan announced plans to launch several gas projects in the medium term. These are the Urikhtau Central (Aktobe region), Western Prorva (Atyrau region), and Kalamkas (Mangystau region). These gas projects will provide an increase in production of over 2 billion cubic meters per year. Together with international companies, 12 more promising exploration projects are being worked out, as well as projects for additional exploration of existing fields.
On December 4, KazMunayGas put into operation the Eastern Urikhtau oil and gas field in the Mugalzhar district of the Aktobe region. The East Urikhtau oil and gas field (recoverable oil reserves of 4.7 million tons and dissolved gas of 2.5 billion cubic meters) was discovered in 2015. Eastern Urikhtau's oil and gas output is estimated to reach 89,000 tons of oil and 46 million cubic meters of gas in 2024.
On December 22, a large gas condensate field, Rozhkovskoye, was put into commercial operation in the West Kazakhstan region. The gas condensate field was discovered in 2008 as a result of a wide range of geological exploration work. It is planned to produce 14.2 billion cubic meters of raw gas and 7.1 million tons of condensate until 2040. The subsoil use right is held by a joint venture comprising KazMunayGas (50 percent), Hungarian company MOL Group (27.5 percent), and Chinese Sinopec (22.5 percent). To date, $534 million has already been invested in the field. It is expected that due to the development of the Rozhkovskoye field, the National Fund of Kazakhstan will be replenished by 501 billion tenge (about $1.09 billion) and the local budget by 110 billion tenge (about $239 million).
Kazakhstan's co-op with Russia
On January 1, Kazakhstan extended the agreement on the transportation of Russian oil to China. The agreement will run through January 1, 2034. As part of the agreement, Kazakhstan will transit around 10 million tons of Russian oil to China via the Atasu-Alashankou oil pipeline. Oil transit is carried out by Russia's Rosneft and Kazakhstan's KazTransOil.
In February, it was revealed that KazMunayGas and the Russian Lukoil energy corporation agreed on the joint development of the Kalamkas-Sea, Khazar, and Auezov subsoils in the Kazakh sector of the Caspian Sea. Consequently, Lukoil became the strategic partner of KazMunayGas in the development of this area of subsoil.
Another important event in the first half-year was the signing of an agreement between Kazakhstan's QazaqGaz national company and Russia's Gazprom on the transportation of Russian natural gas to Uzbekistan. In this regard, Uzbekistan plans to import 2.8 billion cubic meters (9 million cubic meters per day) of Russian gas annually.
In addition to ensuring the supply of gas within the country, Kazakhstan also strives to deliver its gas to neighboring countries. In line with this, QazaqGaz, Kazakhstan’s national gas company, proposed to Gazprom, a Russian energy corporation, the construction of a gas pipeline from Russia to China, running through the territory of Kazakhstan.
On August 16, KazMunayGas and Russia's Lukoil reached the final stage of an agreement on corporate procedures for the sale of 50 percent of the share of Kalamkas-Khazar Operating LLP in favor of Lukoil.
On October 7, Russia launched gas exports to Uzbekistan via the Central Asia-Center gas pipeline, passing through the territory of Kazakhstan. The export launch ceremony was attended by the President of Kazakhstan, Kassym-Jomart Tokayev, the President of Russia, Vladimir Putin, and the President of Uzbekistan, Shavkat Mirziyoyev.
It was announced that Kazakhstan plans to supply about 800 million cubic meters of Russian gas to Uzbekistan by year-end. The two-year agreement assumes a supply volume of 9 million cubic meters per day, or almost 2.8 billion cubic meters per year.
At the end of November, Director of the Transportation Department of KazTransOil JSC Abay Beysembayev announced that KazTransOil JSC plans to triple the volume of transit of Russian oil through the territory of Kazakhstan to Uzbekistan. Sanoat Energetika Guruhi Company (Uzbekistan) has submitted an application to KazTransOil JSC for 2024 for the transit of 500,000 tons of Russian oil to Uzbekistan, with the possibility of increasing to 1 million tons. The volume of Russian oil transiting to Uzbekistan via KazTransOil's main oil pipeline system is estimated to be 154,000 tons in 2023. KazTransOil JSC transported 104,000 tons of Russian oil to Uzbekistan between January and October 2023.
Kazakhstan's co-op with Azerbaijan
It was announced that the State Oil Company of the Azerbaijan Republic (SOCAR) started the transit of Kazakh oil through the Baku-Tbilisi-Ceyhan (BTC) pipeline, with the first shipment of Kazakh oil from the Tengiz field arriving at the Sangachal Terminal in Azerbaijan from the port of Aktau via the “President Heydar Aliyev” tanker on March 23. Last year, the State Oil Company of the Azerbaijan Republic (SOCAR) and KazMunayGas signed an agreement that aims to transit 1.5 million tons of oil annually.
The export of the first batch of Kazakh oil via the Baku-Tbilisi-Ceyhan pipeline to Romania took place in April. The first batch of oil with a volume of 80,000 tons from the Ceyhan terminal was transported by the ALATAU tanker, owned by Kazakhstan's Kazmortransflot LLP (a subsidiary of KMG), which proceeded towards the Romanian port of Constanta with unloading for the Petromidia refinery.
In addition, Kazakhstan's KazTransOil increased the volume of Kazakh oil exports to the port of Baku by 12 times from January through August 2023. Thus, the supply of oil in the direction of the Baku port increased from 69,000 tons to 838,000 tons. KazTransOil JSC announced plans to send 1.4 million tons of oil to the Baku International Sea Trade Port. According to the latest data, the volume of Kazakh oil exports through Azerbaijan based on the results of the 11 months of 2023 amounted to 1.238 million tons.
Co-op with international companies in the oil and gas field
Another document concluded by KazMunayGas was a Memorandum of Understanding (MoU) signed with Shell Kazakhstan B.V., the subsidiary of Shell PLC. The MoU was signed to foster collaboration on the matter of the future development of Kazakhstan’s oil and gas sector on mutually beneficial terms.
In an effort to explore Kazakhstan's subsoil, KazMunayGas and China's Sinopec International Energy Investment Limited (Sinopec) signed an agreement in the field of geological exploration of the subsoil. The document assumes a joint study of 17 exploration sites located within the main and poorly studied sedimentary basins.
Furthermore, Kazakhstan's KazMunayGas national company and Germany's Rosneft Deutschland signed a contract for the supply of crude oil to the PCK Raffinerie refinery in Schwedt, Germany. The volume of supplies will be 100,000 tons per month until the end of 2023 from the Karachaganak field. The volume of deliveries to Germany in 2023 will be no less than 890,000 tons.
It was announced that QazaqGaz and QatarEnergy LNG plan to start cooperation in the gas sector. The companies will consider the prospects for cooperation in the fields of gas processing and gas chemistry, as well as the joint implementation of compressed natural gas (CNG) and liquefied natural gas (LNG) projects in Kazakhstan.
Moreover, Kazakhstan's KazMunayGas and China National Offshore Oil Corporation (CNOOC) signed a Memorandum of Understanding on October 16 in Beijing. As part of the document, the parties will conduct joint geological research on promising exploration projects and expand cooperation on existing fields and oilfield services on Kazakh territory.
In addition, on October 18, Kazakhstan's QazaqGaz signed a new gas export contract with China's PetroChina International for 2023–2026. The agreement was signed within the framework of the "One Belt, One Road" Summit, with the participation of President Kassym-Jomart Tokayev and the Kazakh delegation. The signed agreement will allow the companies to bring cooperation on the export of Kazakh gas to China to a new, effective level.
At the same time, the Kazakh gas company QazaqGaz (a national company) and the Chinese company Geo-Jade Petroleum Corporation will jointly develop the Pridorozhnoe gas field in the South-Kazakhstan region. In this regard, Chairman of the Board of QazaqGaz Sanzhar Zharkeshov and President of Geo-Jade Petroleum Corporation Day Xiaoping signed an agreement on basic principles in Beijing. According to the documents, design work will begin in 2024.
