Analytical Service, Agency for Research on Return on Investments
Gas sector of oil and gas complex of Kazakhstan represents one of the pricipal components of the national economy.
Natural gas has become the more promising energy-carrier for Kazakhstan; the explored and valued reserves of natural gas (with the account of newly discovered deposits on the Caspian shelf) make up to 3.9 trillion cubic meters, and its potential resources reach 6-8 trillion cubic meters. The peculiarity of the gas reserves discovered is that natural gas is produced along with crude oil and condensate on all deposits almost and, especially, on the newly developed large deposits. Therefore, active development of these deposits and sharp increase in oil production in the recent years require utilization of the growing volumes of the associated gas produced.
The approximate allocation of total gas reserves of 3.9 trillion cubic meters is as follows: 34.5% are the Kashagan associated gas, 23.2% are Karachaganak gas and 17.3% are Tengiz gas, the remaining part is shared between smaller deposits. According to BP Statistical Review, Kazakhstan possesses signifcant gas resources with proven reserves of 1.82 trillion cubic meters, which are close to Iraq and Uzbekistan indications. Reserves and production ratios are high as well, which are 69.8 years. The newly discovered gas deposits are currently related to new oil deposits in the Caspian Sea shelf. In addition to the shelf, there are perspective areas in the Aral Sea. Thus, the real situation on the gas reserves is unclear so far, and may require 10 to 20 years to be clarifed, considering technological development of exploration, utilization, processing, extraction increase and production of new gas types.
Production of Natural Gas. Among primary energy-carrying resources, the consumption of natural gas in Kazakhstan takes 12% only. The current natural gas production is low. According to the forecasts of the Ministry of Oil and Gas of RK, in 2010 gas production reached 37.4 billion cubic meters. Taking into account the national gas re-serves and signifcant economical and ecological effect of this fuel consumption, such situation cannot be considered as acceptable. Therefore Kazakhstan purposes to accord special priority to the national gas industry development.
However, the main part of the gas reserves developed is concentrated in oil and gas condensate deposits, which constraints the gas resources deployment. Gas is produced simultaneously with crude and condensate. About twenty deposits contain non-associated gas. This is why up to recent time gas production was a part of the oil producing companies’ activity.
Another limiting factor is the complexity of the gas resources extraction. Almost all forecasted resources locate in the subsalt layers of the Pre-Caspian Lowland and are characterized with the complexity of the extraction due to deep water, multiple components and high concentration of sul-furic compounds. At the same time, deposits with shallow depth and free of sulfuric compounds have moderate gas reserves with high local importance to gasify restricted ar-eas.
Herewith, the long-term Development Strategy until 2030, the Development Concept of the Gas Industry of the Republic of Kazakhstan until 2015 provide for quality changes in a slant on the questions regarding the consumption of the national gas resources available.
After the issues solved on the associated gas utilization as a limiting factor of the crude production growth, the sector of gas production, processing and marketing shall become the primary industry of the national economy development.
In the future, Kazakhstan expects to join the states with the world’s largest proven natural gas reserves and to become one of the three main producers and exporters of natural and liquefed gas on the territory of CIS. By 2015, gas production is planned to reach 59.3 billion cubic meters against 7.8 billion cubic meters produced in 1991. Meanwhile, production of commodity gas will increase from 21.3 billion cubic meters produced in 2010 to 25.3 billion cubic meters in 2011 and to 30.7 billion cubic meters in 2015. Production of liquefed gas is planned to increase from 2 million 245 thousand in 2010 up to 2 million 360 thousand in 2015.
In the view of the gas production increase, its faring reduces. For example, in 2006 gas production volume was recorded at the level of 27 billion cubic meters, while faring was at the level of 3.1 billion cubic meters; in 2008 gas production reached 33.5 billion cubic meters, while 1.8 billion cubic meters were fared; in 2010 37.4 billion cubic meters were produced and 1.4 billion cubic meters were fared.
Gas Processing. Since a bigger part of the gas produced is the associated gas, it requires processing on the gas processing plants (GPP) to obtain commodity gas and further deliver it to consumers and enterprises. The largest gas processing plants in Kazakhstan are the Kazakh, Tengiz, Kara-chaganak and Zhanazhol. Kazakh gas processing plant, located in Mangistau region, was constructed to utilize the associated gas from Mangyshlak deposits and to supply the Aktau plastics plant with the raw material. Gas processing capacities at Tengiz were in-creased after implementation of the Second Generation Project. It is proposed that after the plant reaches its full production capac-ity, about a third part of sour gas will be injected back to the header, and the remaining part will be used to produce commodity gas, propane, butane and sulfur. In terms of originality and innovation, the construction project on the expensive gas and chemical complex in Atyrau region seems to be inter-esting. Despite of some delays in its implementation, the government promotes signing of a long-term agreement (13-15 years) for Tengiz gas supply to this complex.
Zhanazhol oil and gas refnery, consisting of three GPP, was built by JSC CNPC-Aktobemunaygas under the gas utilization program implementation. Current capacity of the frst Zhanazhol GPP constructed in 1984 and reconstructed in 2000-2003 com-poses 800M cubic meters per year. Capacity of the second GPP put into operation in 2003 is 1.4B cubic meters, and capacity of the frst stage of the third GPP started in December 2007 is 2 billion cubic meters. With this, in the frame of the GPP 2nd and 3rd stages under progress, the volume will compose 5 billion cubic meters per year. Karachaganak project is being developed by Karachaganak Petroleum Operating. With the view of further development of the Kara-chaganak deposit, the issue is under discus-sion on the capacities expansion of Orenburg GPP where KPO supplies its gas for processing. After the operational capacities are ex-panded, Orenburg GPP will be supplied up to 16 billion cubic meters of raw gas for processing annually during 15 year. Also, in the near future the commissioning of GPP is planned in Karabatan village, Atyrau region to process the hydrocarbons produced in Kashagan to commodity condition.
Transit and export capacities. The dynamic growth of gas production is impossible without a developed pipeline infrastructure. The basis of the gas transmission industries of the country is a transit main gas pipelines across eight regions of Kazakhstan, with the total length of more than 10 thousand km. The main transit lines are Central Asia – Center, Bukhara – Ural, Orenburg – Novopskov, used to transit Turkmen and Uzbek gas.
Kazakhstan has been actively developing pipeline transportation and infrastructure. The most relevant for the gas transportation industry in the republic is the project of reconstruction and modernization of the pipelines, particularly main gas pipeline Central Asia – Center (CAC), which serves the export of Kazakh and Central Asian gas to Russia and Europe. Besides, in 2009 Kazakhstan – China transit pipeline was built with capacity of 30 billion cubic meters per year, which represents a part of the Turkmenistan – China main pipeline. It has already transported 15.5 billion cubic meters of Turkmen gas. In December 2010, construction started of the biggest national internal gas line Beyneu – Shymkent with the carrying capacity of up to 15 billion cubic meters, which though its 26 branches will provide gas supply to the south regions with the lack of gas.
Today, the bigger part of Kazakh gas ex-ported are produced in Karachaganak (over 6 billion cubic meters in 2010), as well as in Tengiz (4.94 billion cubic meters accordingly).
Kazakh gas is supplied to Russia only. However, after putting into operation of the Beyneu – Shymkent gas line in 2013, there will be another independent direction for external supplies, China may be supplied with 5 to 10 billion cubic meters of Kazakh gas. After the expected expansion of the carrying capacity of the Turkmenistan – Kazakhstan – China from 30 to 55 billion cubic meters per annum, Kazakhstan will expand its capacities as a transit state