Phase 2 of Kashagan project postponed till 2018-2019 – head of KazMunayGas

August 12. Interfax-Kazakhstan

Phase 2 of Kashagan project postponed till 2018-2019 - head of KazMunayGasThe second phase of the Kashagan offshore oil project in Kazakhstan has been postponed until 2018-2019.

“On July 27 the six participants of the Kashagan project informed the Kazakh oil and gas minister that the second phase of the Kashagan project would be delayed till 2018-2019, which, consequently, would affect the launch of the Kazakh Caspian Transport System,” Kairgeldy Kabyldin, the president of National Company KazMunayGas (KMG), told Samruk-Kazyna Board of Directors in Astana on Thursday.

In January 2009 the partners of the project agreed to create a new company to become the operator of the Kashagan project and the same month North Caspian Operating Company (NCOC) took over the Kashagan project from Agip KCO, all the shareholders still having the same stakes in the new operating company as follows: Shell, KazMunayGas, Eni, ExxonMobil, Total with a 16.81% stake each, ConocoPhillips 8.4% and Inpex 7.56%.

NCOC overviews all activities and manages planning, coordination, reservoir simulation, conceptual studies and early development plans, government interfaces for the whole venture.

Under PSA the licensed area will also include the three oil-bearing structures Kalamkas, Aktoty, Kairan in addition to Kashagan. These 4 structures consist of 11 marine blocks, which occupy an area of about 5,600 square kilometers.

NCOC estimates the recoverable oil reserves of the Kashagan field at 11 billion barrels and the total oil in-place at 35 billion barrels.

The bulk of the work at the onshore and offshore facilities had been completed by the end of 2009, as agreed with the Kazakh government, with a view to starting production at Kashagan at the end of 2012.

The launch of production under phase one is officially slated for the end of 2012.

Phase one production is expected to peak at 300,000 bpd (stages one and two), rising later to 450,000 bpd. Peak production of 1.5 million bpd is possible during full-scale production, expected towards the end of the next decade.

The Kazakh Caspian Transport System (KCTS) is designed to export the growing volume of Kazakh oil produced primarily at the Kashagan field, through the Caspian Sea to international markets through the East-West energy corridor along the route Eskene-Kuryk-Baku-Tbilisi-Ceyhan. The oil is supposed to be transported through a new pipeline Eskene-Kuryk on the Kazakh Caspian coast to the Kuryk seaport, which is to be expanded and from which the tankers will sail to Azerbaijan, for the oil to be further transported through the Baku-Tbilisi-Ceyhan pipeline (BTC).