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Kazakhstan: Kazakhstan Natural Gas

2011/06/25

In January 2010, the Oil and Gas Journal estimated Kazakhstan's proven natural gas reserves at 85 trillion cubic feet (Tcf). Natural gas production in Kazakhstan is almost entirely associated gas. Most of Kazakhstan's natural gas reserves are located in the west of the country, with more than half situated in the Karachaganak oil and gas field, which reportedly has proven natural gas reserves of 48 Tcf. Kazakhstan shifted from being a net natural gas importer to becoming a net exporter of 134 Bcf in 2009.

Natural Gas Production

Annual marketed natural gas production has been trending upward from 162 billion cubic feet (Bcf) in 1999 to 387 Bcf in 2009. While total gross gas production was 1.26 Tcf in 2009, 69 percent of the gas produced, 870 Bcf in 2009, was reinjected back into the fields to enhance oil production. The 2 largest natural gas producing fields are also the largest oil producing fields.

The Karachaganak oil and gas field reportedly produced around 558 Bcf gross gas in 2008, close to half of Kazakhstan's total gross gas production. The consortium developing Karachaganak expects gross production to reach 900 Bcf by 2012. While phases 1 and 2 were focused on condensate production, phase 3 is geared to boost gas output significantly, allowing Kazakhstan to become a major natural gas producer and exporter.

The Tengiz oil and gas field reportedly produced 494 Bcf gross gas during 2008, and the consortium developing the field says it could boost production to 780 Bcf by 2015. The remainder of gas produced came from other smaller fields. Kazakhstan reportedly plans to boost its total gross gas production to 2.5 Tcf by 2015, with gas exports of 1.4 to 1.6 Tcf planned, as new pipeline infrastructure allows the country to export its rising gas output.

Development of the Amangeldy field is important for Kazakhstan's energy security, as gas output from the field is geared to make the country self-sufficient in gas. The field is located in southern Kazakhstan and is being developed as a joint venture of KMG and Spain's Repsol. It was reported as producing 35 Bcf in 2010 and has an estimated 883 Bcf of recoverable reserves.

Natural Gas Imports and Exports

Kazakhstan has two separate domestic natural gas distribution networks, one in the west, which services the country's producing fields, and one in the south, which mainly delivers imported natural gas to the consuming regions. The lack of internal pipelines connecting Kazakhstan's natural gas-producing areas to the country's industrial belt between Almaty and Shymkent has hampered the development of the country's natural gas resources. Southern Kazakhstan receives much of its natural gas supplies from Uzbekistan via the Tashkent-Shymkent-Bishkek-Almaty pipeline even as the country exports gas from its northwestern region. KazTransGas, a subsidiary of KMG, controls and manages the country’s gas pipeline transportation system.

Kazakhstan currently serves mainly as a transit state for natural gas pipeline exports from Uzbekistan and Turkmenistan to Russia and China. However, in 2009, for the first time exports exceeded imports by 134 Bcf, making Kazakhstan a net oil exporter.

 

Kazakhstan's Natural Gas Exports and Imports, 1992-2009

 

Central Asia Center Pipeline (CAC)

The two branches of the Central Asia Center (CAC) gas pipeline, controlled by Gazprom, meet in the southwestern Kazakh city of Beyneu before crossing into Russia at Alexandrov Gay and feeding into the Russian pipeline system. The eastern branch, capacity 2.1 trillion cubic feet per year (Tcf/y), originates in the southeastern gas fields of Turkmenistan. The western branch, capacity 176 Bcf/y, originates on the Caspian seacoast of Turkmenistan. Almost all Turkmen and Uzbek gas is delivered via the eastern branch, as the western branch is more than 35 years old and not all of it has been renovated, causing periodic problems. Intergas Central Asia, a subsidiary of KMG, is the operator of the Kazakh pipeline sections and has been increasing its annual investment in repairing and modernizing the western branch of the CAC pipeline using internally generated funds.

In December 2007, Russia, Kazakhstan and Turkmenistan announced signing an agreement to renovate and expand the western branch of the CAC pipeline and to construct a new Caspian gas pipeline paralleling the western branch with a capacity of 706 Bcf. Upon this new pipeline’s completion, originally slated for 2012, the route would have a total capacity of 2.8 Tcf, up from around 2.1 Tcf currently. However, construction of the new pipeline was put on hold in 2009 as Turkmenistan seeks to diversify its gas export options and Russia reduces its Turkmen gas imports due to lower European demand.

Central Asia Gas Pipeline (CAGP)

In December 2007, CNPC pledged to invest $2.2 billion in the CAGP, which starts at Gedaim on the border of Turkmenistan and Uzbekistan and extends 1,130 miles across Kazakhstan east to the Chinese border. The pipeline system was built to transport gas from Turkmenistan to China. CNPC, KMG and Uzbekneftegas are partners in this project. Stage 1 of the CAGP transports natural gas from eastern Turkmenistan via Uzbekistan and Kazakhstan to Alashankou, China, where it connects to China's West-East domestic pipeline system. The Turkmenistan section was completed in October 2009, the Uzbek section in November 2009, and the Kazakh section in December 2009, when gas began flowing through the pipeline. In mid-2010, the pipeline was reportedly pumping a total of 459 Bcf, about half from Turkmenistan and the rest from Kazakhstan and Uzbekistan.

 

Full capacity is to reach 1.4 Tcf (40 bcm) by early 2014, when stage 2, the Kazakhstan-China gas pipeline (KCGP), is completed. Stage 2 is a pipeline running from Beyneu in Kazakhstan's gas-producing western region to Shymkent in its southern industrial region. This new pipeline will be 932 miles long and will connect to the CAGP near Shymkent, enabling Kazakhstan to export gas from Aktobe, Tengiz and Karachaganak fields to China as well as ship an expected 353 Bf to the Shymkent area for domestic use.

Bukhara-Urals Pipeline

A transit gas pipeline from Uzbekistan via Kazakhstan to Russia, this pipeline has capacity of 706 Bcf but it is largely idle.

Tashkent-Shymkent-Bishkek-Almaty Pipeline

An import and transit gas pipeline that provides gas supplies from Uzbekistan to Kazakhstan's main southern population centers, this pipeline has a capacity of 160 Bcf. Between Shymkent and Almaty, the line crosses Kyrgyz territory to supply Bishkek, the Kyrgyz capital. Frequent disruptions in supply to Almaty due to disputes between Khyrgyzstan and Uzbekistan have prompted Kazakhstan to develop its own gas fields in the region.

Kazakhstan Natural Gas Pipeline Routes

Kazakhstan Natural Gas Pipeline Routes

 

Source: Kazakhstan Energy Ministry

Natural Gas Downstream

Karachaganak's natural gas output is mainly exported northward to Russia's Orenburg processing plant. An agreement between Gazprom and KMG in 2008 created KazRosGas, a joint venture that will purchase gas and expand the Orenburg plant by 2012. Deliveries of Karachaganak gas to the Orenburg plant, located 84 miles from the field, were 280 Bcf in 2008. The volume of Kazakh gas processed at Orenburg is projected to exceed 620 Bcf by 2012.

 

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