EBRD finances oil and gas field chemicals production in Kazakhstan

Dec 27. EBRD

By Sergiy Grytsenko

EBRD finances oil and gas field chemicals production in KazakhstanThe European Bank for Reconstruction and Development is supporting the production of chemicals used by the oil industry in Kazakhstan, with a US$ 8 million loan to RauanNalco, a venture between RauanMunaiChim of Kazakhstan and Nalco Company, USA.

The EBRD’s 7-year loan with a two-year grace period will be used to support the company’s expansion. The loan will finance the construction of a new blending plant in Atyrau, Western Kazakhstan, with capacities to produce 9,400 tonnes of specialty chemicals per year. The company’s move to a new location and the use of advanced manufacturing technology will also result in energy efficiency improvements in line with stringent environmental standards.

With this financing, the EBRD is supporting Nalco’s first investment in a processing facility in the region.  The rapidly growing oil and gas industry in Kazakhstan will require increasing quantities of oil field chemicals as production from Kashagan and other fields in the Caspian region ramps up. About 90 types of special chemicals are used throughout the oil and gas extraction and processing cycles.

“The new plant will adopt more efficient and environment-friendly manufacturing processes, which in turn are bound to have a further impact on the whole sector in Kazakhstan,” said Frederic Lucenet, EBRD Director for Manufacturing and Services.

On completion of its expansion plans, RauanNalco will be producing a wide range of the chemicals at its own blending plant. The company will decrease production and delivery costs, as well as offer additional services to the customers engaged in the geological surveys, oil extraction, processing, refining, storage and petrochemical production.

“This investment will mark a step change in our manufacturing footprint in Kazakhstan and the Caspian Region. With the new plant, Nalco’s product line will significantly increase its local content, providing greater reliability and flexibility to our customers. RauanNalco has been supporting the rapidly growing oil and gas sector in the region. With continued development of the country’s major Tengiz, Karachaganak, and Kashagan oil fields, it is expected Kazakhstan will see a two-fold increase in its current production by 2020,” said Yerken Beglerov, Chief Financial Officer of RauanNalco.

The majority of the RauanNalco-produced chemicals are needed in the extraction, refining, storage and transportation of oil. At the extraction stage as well as in the maintenance of the oil wells, the chemicals are used to remove water and salt, minimize corrosion, inhibit scale formation and improve process efficiency.

During storage and transportation of the oil, the chemicals are applied to minimize corrosion of metal surfaces, minimize wax and asphaltene build-up, improve fluid flows, decrease freezing temperatures and prolong the life of pipelines. They are also used in gas production and transportation helping to prevent the formation of solid methane hydrates.

Since the beginning of its operations in Kazakhstan, the EBRD has invested over €2.8 billion in over 130 projects in various sectors of the Kazakh economy, mobilising additional investments in excess of about €7 billion, with 65 per cent of the projects’ being investments into the development of the country’s private sector.