We may get back to constructing fourth oil refinery to accommodate Kashagan oil: PM Massimov 29 февраля 2012, 16:37
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An oil refinery. Photo courtesy of wordpress.com
Kazakhstan’s PM Karim Massimov does not rule out constructing a fourth oil refinery in Kazakhstan given Kazakhstan’s participation in the promising Kashagan project.
Oil and Gas Minister Sauat Mynbayev had said earlier that, “overhaul of the three refineries before 2015 [based in Pavlodar, Shymkent and Atyrau] will enable to raise processing to 17.5 million tons, introducing deeper conversion to start producing petrol in line with Euro-5 emission standards”. As of today the refineries process a bit over 13 million tons a year.
“Kashagan is a major project for Kazakhstan. It’s not only about the nation’s participation in the project, but also about new oil (…) We may get back to the question of constructing a fourth oil refinery in Kazakhstan to accommodate Kashagan oil so that we could be 100% sure that we are independent in terms of fuel supplies(…)”, Mr. Massimov said when speaking before the national Majilis (lower chamber) February 29.
The Kashagan field, named after a 19th century Kazakh poet from Mangistau, is located in the Kazakhstan sector of the Caspian Sea and extends over a surface area of approximately 75 kilometers by 45 kilometers. The reservoir lies some 4,200 meters below the shallow waters of the northern part of the Caspian Sea and is highly pressured (770 bar of initial pressure). The crude oil that it contains has high ‘sour gas’ content.
The development of Kashagan, in the harsh offshore environment of the northern part of the Caspian Sea, represents a unique combination of technical and supply chain complexity. The combined safety, engineering, logistical and environmental challenges make it one of the largest and most complex industrial projects currently being developed anywhere in the world.
According to Kazakhstan geologists, geological reserves of Kashagan are estimated at 4.8 billion tons of oil. According to the project’s operator, the oilfield’s reserves are estimated at 38 billion barrels, with 10 billion barrels being recoverable. Besides, natural gas reserves are estimated at over 1 trillion cubic metres.
The consortium developing the field comprises Eni, Shell, ExxonMobil, Total and KazMunaiGaz (all with a 16.81% stake) as well as ConocoPhillips (8.4%) and Japan's Inpex (7.56%).
During the talks May 18 with Kazakhstan’s President Nursultan Nazarbayev, Paolo Scaroni, Eni Chief Executive Officer and General Manager, promised that “the first oil is expected in December 2012 or two-three months later than that”.
According to KMG, the Company plans to invest $8 billion into the project before 2014, with the total of investments into a range of projects standing at $20 billion.