KMG joined KPO partners for KEP1 in Karachaganak 3
Through its national oil company (NOC) KazMunaiGas (KMG) Kazakhstan joined in 2012 the partnering companies BG Group (BG), Eni, Chevron and Lukoil in the Karachaganak Petroleum Operating BV (KPO) joint venture for the Karachaganak Expansion Project (KEP) Stage-1 of the oil and gas field development Karachaganak phase-3 in the northwest of the country.
To do so the previous partners have accepted to reduce their respective stake in the Karachaganak joint venture so that the working interests are now shared as following:
– BG 29.25% is the operator
– Eni 29.25% is joint operator
– Chevron 18%
– Lukoil 13.5%
– KMG 10%
Discovered in 1979, Karachaganak is one of the largest oil and gas and condensate field in the world.
Located at the border with Russia, the joined operators BG and Eni estimated its in-place reserves to:
– 9 billion barrels of oil and condensate
– 48 trillion cubic feet (tcf) of gas
First production started in 1984, but BG and Eni signed the first production sharing agreement (PSA) in 1997.
In 2004, BG and Eni supported by Chevron and Lukoil completed the Karachaganak Phase-2 project to export:
– Oil to the Black Sea through the 650 kilometers Caspian Pipeline Consortium (CPC) pipelines
– Gas and condensate to the 150 kilometers north Russia Orenburg gas central processing facilities
A part of the exported gas is re-imported into Kazakhstan for the domestic consumption.
Among BG and Eni local challenges of operating by +/- 40°C temperature, Karachaganak contains a high percentage of high pressure sour gas.
BG and KPO partners stage Karachaganak Expansion
BG and Eni developed the technologies to separate this sour gas and to re-inject it in the reservoir in order to boost the liquids and gas production.
The volume of re-injected sour gas is about the same as the volume of natural gas exported from Karachaganak field.
At the end of 2013, BG and its KPO partners have decided to start the feasibility study for the Karachaganak phase-3 called Karachaganak Expansion Project (KEP).
Because of its size and complexity, KPO decided to phase up the development of the Karachaganak Expansion Project.
For the KEP Stage-1, BG and its KPO partners, are planning to invest $14.5 billion capital expenditure in order to:
– Maintain the production of hydrocarbon liquids (oil and condensate) to the current plateau of 11 million tonnes per year
– Boost the gas production from the current 1.7 billion cubic feet per day (cf/d) to 4 billion cf/d.
With a conceptual study to be completed by the end of 2014, BG and its KTO partners, Eni, Chevron, Lukoil and KMG, are expecting to start Karachaganak Expansion Project front end engineering and design (FEED) on early 2015 in order to award the KEP1 engineering, procurement and construction (EPC) contracts by 2016.
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