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What Does Brexit Mean For UK Oil & Gas?

What Does Brexit Mean For UK Oil & Gas?

While Brexit is unlikely to…

Kazakhstan & Oil Majors Could Build Huge $1B Gas Plant At Giant Kashagan Field

Kashagan

The government of Kazakhstan and a group of international oil companies that develop the huge Kashagan oil and gas field are weighing the possibility of building a gas processing plant near the field estimated to cost US$1 billion, the Deputy Energy Minister of Kazakhstan, Murat Zhurebekov, told Reuters on Thursday.  

The gas processing plant is planned to have a capacity of 1 billion cubic meters (bcm) a year, with the gas expected to come from Kashagan, which is already one of the largest offshore oil fields in terms of production.

Kazakhstan, however, has not decided yet how the project would be financially structured—whether it would use government or private funds, Zhurebekov told Reuters.

The Kazakh government was also in negotiations with foreign oil firms for a similar project at the Karachaganak gas condensate field. Kazakhstan has dropped that project—about which it talked to Chevron, Shell, Lukoil, and KazMunayGaz—because Karachaganak required reinjection of gas to boost production of condensate, the official said.

The North Caspian Sea Production Sharing Agreement (NCSPSA) holds the North Caspian license, which encompasses the Kashagan oil field. The shareholders in the North Caspian Operating Company (NCOC) are Kazakhstan’s state oil and gas firm KazMunayGas, Total, Eni, Royal Dutch Shell, ExxonMobil, China National Petroleum Corporation (CNPC), and Inpex.

Oil production at Kashagan, which started in 2016, is around 400,000 bpd, making the Kazakh field one of the largest offshore oil fields.

Kashagan has reserves of 13 billion barrels of crude and in-place resources of as much as 38 billion barrels. Its development has been challenging, mainly because of climatic and geological peculiarities, and because of cost overruns that saw the final budget more than double on the initial US$20 billion to US$50 billion. There have been plans to bring the field’s production rate to half a million barrels daily.

By Tsvetana Paraskova for Oilprice.com

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