Kazakhstan is evaluating two major options for gasifying its northern and eastern regions, as revealed by the Minister of Energy, Almasadam Satkaliev, during a recent government meeting. The Ministry of Energy continues to study the conditions for the supply of Russian gas to the domestic market while also considering internal infrastructure developments.
"The ministry is studying two options for gasification of the northern and eastern regions," Satkaliev stated.
The first option involves extending the gasification of the Akmola and North Kazakhstan regions by continuing the construction of the second and third stages of the Saryarka gas pipeline.
"The implementation of this project will be possible after the construction of the second line of the Beineu - Bozoy - Shymkent gas pipeline. Today, a feasibility study is being developed. There is an agreement with the Qatari investor on the joint implementation of the project," the minister elaborated.
However, efforts to involve Qatari investors in Kazakhstan's pipeline and gas processing projects have encountered obstacles. In early May, Kazakh Prime Minister Olzhas Bektenov approved a proposed partnership between Qazaqgaz and Qatari UCC Holding to create joint ventures for selected projects. Despite this, a joint plan to build a second pipeline parallel to the existing Beyneu–Bozoy–Shymkent natural gas pipeline has failed to gain formal approval from Trans-Asia Gas Pipeline (TAGP), a subsidiary of China National Oil & Gas Exploration & Development Company (CNODC).
The Beyneu–Bozoy–Shymkent pipeline, jointly owned by Qazaqgaz and TAGP, started operations in 2013 and aims to deliver gas from Kazakhstan's western gas fields, including Karachaganak, to the eastern regions and Almaty. In 2020, its capacity was increased to 15 billion cubic meters per annum to facilitate the transport of excess production from major western developments like Tengiz and Kashagan to the east and for export to China.
Astana has been pressing Qazaqgaz to secure a strategic partner to fund the multibillion-dollar construction of the second pipeline, which is crucial for increasing exports of Kazakh-produced gas to China and competing with Turkmenistan’s export plans. However, TAGP has refused to allow the UCC and Qazaqgaz joint venture to utilize existing support infrastructure for the new pipeline, which could have reduced costs.
Meanwhile, there has been no progress in securing gas purchase contracts with Chinese customers for volumes via the second pipeline. Qazaqgaz, UCC Holding, and CNPC have not yet responded to requests for comment.
Earlier in July, Qazaqgaz announced the formation of three joint ventures with UCC Holding, covering projects to build two associated gas processing plants for the Eni-led Kashagan project and a gas compression facility. While Qazaqgaz holds a 50% share in the gas compression facility project, it seeks to negotiate a wider Qatari role in the processing plants, potentially ceding operatorship to UCC Holding, which may eventually hold a 75% stake in the first facility and the second plant.
As an alternative to the internal projects, the second option under consideration is importing gas from Russia.
"Currently, commercial negotiations are underway between QazaqGaz and Gazprom. The terms of gas supply to the northern and eastern regions of Kazakhstan are being discussed," Satkaliev noted.
In June 2023, the Minister of Energy indicated that the gasification of the eastern part of the country using internal resources would be feasible only after 2027-2028. For the immediate future, Kazakhstan will rely on gas imports from Russia, although it was emphasized that "Russian gas will not be cheap."
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