KazCham

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The Kazakh Minister for the Economy, Yerbolat Dosayev, said on Monday that the preliminary cost of the expansion of oil production at the Tengiz field (second stage), a project that would increase the recoverable amount of hydrocarbons to 38 million tonnes per year by 2021, is estimated at $30 billion.

“There is a direct assignment of the head of state to accelerate the process of project implementation. That’s why we start the project in the spring of next year,” Dosayev said.

The Kazakh Minister for Energy, Vladimir Shkolnik, had earlier reported that a decision on the project to expand oil production at Tengiz would be made before the end of 2015. He stated that the basic requirement for the expansion project is to reduce the cost of its implementation.

Currently, the project partners are Chevron (50%), KazMunayGas (20%), ExxonMobil (25%), and LukArco (5%).

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According to the Kazakh Ministry of Energy, Kazakhstan expects Russia to grant the subsoil use rights for the Caspian “Central” field in 2016, under previously established agreements.

The Central field is located within the Russian territory of the Caspian Sea, but its development must be conducted with the participation of Kazakh partners. It is estimated that reserves at the field total 169.1 million tonnes of equivalent fuel.

In October 2015, the presidents of Russia and Kazakhstan signed a protocol allowing the Russian government to issue a license for the geologic exploration and production of oil and gas at the Central field.

After obtaining the rights for subsoil use, Kazakhstan plans to carry out the design and survey work, as well as to assess the damage done to aquatic bio resources by engineering research at the field.

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The government of Kazakhstan has approved a list of state companies to be offered for privatisation as part of its long-term privatisation plan for 2016-2020.

The plan approves a list of large state-owned companies and organisations that will be privatised, and includes the pharmaceutical company SK-Pharmacy, national space company Kazakhstan Garysh Sapary, state road enterprise Kazakhavtodor, Khorgos international centre of cross-border cooperation, the airport of Astana, the Almaty sanatorium, the Kazakh national film studio, the airports of Kostanai and Petropavlovsk, the Korkyt Ata airport in Kyzylorda, and the Duman entertainment centre in Astana.

The list for priority privatisation also includes the national railway company Kazakhstan Temir Zholy (through IPO), national oil and gas company KazMunayGas (IPO), national atomic company Kazatomprom (IPO), national post service Kazpost (IPO), airlines Air Astana (IPO) and Qazaq Air, national telecommunications operator Kazakhtelecom, the airports of Aktobe, Atyrau and Pavlodar, the Aktau international seaport, and the national agricultural holding KazAgro.

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Samruk-Kazyna, the sovereign wealth fund of the Republic of Kazakhstan, has announced memorandums of understanding and agreements for five projects totalling $4 billion at the meeting of the Kazakhstan-China Business Council (KCBC).

The event was attended by more than 350 representatives from governments and businesses from both countries and included keynote remarks from Kazakhstan’s Prime Minister Karim Massimov and Samruk-Kazyna’s CEO Umirzak Shukeyev.

Key announcements at the KCBC meeting included:

• Agreement between KazMunayGas and Sinopec in oil exploration and production, petrochemicals, engineering and renewable energy.
• Agreement between Kazakhstan’s national atomic company, Kazatomprom, and China General Nuclear Power for the design and construction of a plant for the production of fuel assemblies in Kazakhstan and the joint development of uranium deposits in Kazakhstan.
• Agreement between Kazakhstelecom and China Telecom to roll out fibre optic communications lines in rural Kazakhstan.

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The Samruk Kazyna, Baiterek and KazAgro national holdings will be featured in the new privatisation programme, after which they will either be transformed into lean organisations or liquidated, according to the Kazakh President Nursultan Nazarbayev.

The assets of the Samruk-Kazyna national welfare fund include: the KazMunaiGas national oil and gas company, the Kazakhstan Temir Zholy railway operator, Kazakhstan Electricity Grid Operating Company (KEGOC), Kazakhtelecom telecommunications operator, and the Kazatomprom national nuclear company.

The Baiterek national management holding includes: JSC Development Bank of Kazakhstan, JSC Investment Fund of Kazakhstan, JSC Housing Construction and Savings Bank, JSC Kazakhstan Mortgage Company, JSC KazExportGarant, JSC Entrepreneurship Development Fund Damu, JSC National Agency for Technological Development, JSC Kazakh Fund of Mortgage Guarantees, JSC Kazyna Capital Management, JSC Baiterek Development, and JSC Public Private Partnership Advisory Center.

The KazAgro National management holding includes: the National company Food Contract Corporation JSC, KazAgroProduct JSC, KazAgroFinance JSC, Agrarian credit corporation JSC, Fund for Financial Support of Agriculture JSC, KazAgroGarant JSC and Kazagromarketing JSC.

 

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Kazakhstan’s Ministry of Energy expects that the investment decision on the expansion project of the Karachaganak oil and gas field will be made by 2018, said the Deputy Energy Minister Magzum Mirzagaliev. It is also expected that the design of the Karachaganak field will be completed by the same year.

Discovered in 1979, the Karachaganak field is one of the largest gas condensate fields in the world, and accounts for around 49% of Kazakhstan’s gas production and 18% of the country’s oil production.

Astana Times

The 42nd regular session of the working group on the Convention of the Legal Status of the Caspian Sea opened at the Kazakh Foreign Ministry in Astana Nov. 18.

Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan have been negotiating the legal status of the inland body of water since the early 1990s, when the issue arose following the collapse of the Soviet Union and the appearance of four new states on its shores. “During the negotiation process, Kazakhstan has since the beginning followed a compromise approach that takes into account the interests of all riparian countries. For this reason, Kazakhstan’s position on the main aspects of the legal status of the Caspian Sea was spread as an official document of the United Nations (UN) in 1997 and to date remains consistent and unchanged,” said Kazakh Foreign Minister Erlan Idrissov, explaining Astana’s position.

Kazakhstan’s approach is based on the need to establish the territorial waters, fishing zones and common water space in the Caspian Sea in accordance with the provisions of the 1982 United Nations Convention on the Law of the Sea to ensure the political and economic interests of the littoral countries.

“Concerning delimitation of the Caspian Sea bottom, Kazakhstan adheres to the position that it should be divided among the littoral states on the areas within which they have the sovereign right to conduct exploration and development of the natural resources of the Caspian shelf,” said Idrissov.

He suggested it would be advantageous to carry out delimitation of the Caspian Sea in accordance with existing international methods and practices based on the agreement of neighbouring states, taking into account generally-recognised norms of international law.

“Currently, Kazakhstan has concluded appropriate bilateral agreements with Russia, Azerbaijan and Turkmenistan which ensure the international legal framework for development of oil and gas reserves in the northeastern part of the Caspian Sea, thus creating an attractive and stable investment climate,” said the Kazakh minister.
The settlements indicate delimitation of the Kazakh sector of the sea bottom is almost complete, he said.

Regarding the order of navigation, Idrissov suggested the position which fully corresponds to the decisions of the fourth summit in Astrakhan. Thus, Kazakhstan recommended establishing a uniform regime in the national sovereignty area in accordance with the basic provisions of the law of the sea for all kinds of vessels, except warships. The authorisation procedure needs to be applied to warships to pass through the territorial waters.

In marine areas beyond the territorial waters, Kazakhstan proposed establishing freedom of navigation, based on the condition that vessels respect sovereign and exclusive rights of riparian states for the use of mineral resources and biological resources fishery.

The laying of pipelines and transit is extremely important to the interests of each state, said Idrissov, because it directly affects the degree of economic development, as well as international trade and economic relations in particular.

Trend News

Kazakhstan plans to commission 106 facilities generating energy from renewable energy sources by late 2020, the country’s Energy Ministry said.

The total capacity of these facilities will be 3054.55 megawatts.

The country will commission 28 solar power plants with the capacity of 713.5 megawatts in Almaty, Zhambyl, Atyrau, Karaganda, Kyzylorda, South Kazakhstan and Mangistau provinces.

The ministry said that all these projects in the sphere of renewable energy sources of Kazakhstan are implemented with attracted funds and are not financed from the state budget.

In general, as part of the concept for transition of Kazakhstan to “green economy”, the volume of electricity generated from renewable energy sources is planned to reach 3 percent of the total volume of electricity by 2020 and 10 percent by 2030.

Moreover, the Energy Ministry said that under the law “Support for use of renewable energy sources”, fixed tariffs for the electricity generated from renewable energy sources have been approved since 2014 for 15 years.

The tariffs for the electricity generated by wind farms were set at 22.68 tenges ($1 = 307.314 tenges) per kilowatt hours; solar power plants – 34.61 tenges; small hydro power plants – 16.71 tenges; and biogas plants – 32.23 tenges per kilowatt hours.

The Settlement and Financial Center of Kazakhstan is engaged in purchase and sale of electricity generated from renewable energy sources.

In addition, according to the law, energy transmission companies are required to provide the companies producing energy from renewable energy sources, with the access to energy transmission networks. Energy transfer from renewable energy sources is free of charge.

Companies engaged in designing, construction and operation of facilities for the use of renewable energy sources, get investment preferences in accordance with the legislation of Kazakhstan.

World Nuclear News

KazAtomProm and Centrus Energy have signed a Memorandum of cooperation that specifies the development of mutually beneficial relations on competitive supplies of Kazakhstan’s uranium to the world market.

The document was signed by KazAtomProm Chairman Askar Zhumagaliyev and Centrus Energy Senior Vice-president Kevin Alldred during Zhumagaliyev’s official visit to the United States.

KazAtomProm is the world’s biggest uranium producer, while Bethesda, Maryland-based Centrus Energy supplies enriched uranium fuel for commercial nuclear power plants in the USA and around the world.

Kazakhstan became the leading supplier of uranium to US nuclear power plants in 2014, overtaking Australia, according to the US Energy Information Administration (EIA). According to the EIA’s Uranium Marketing Annual Report, published in May, of the uranium purchased by U.S. reactor owners and operators, 23% was of Kazakh origin, while 20% came from Australia and 18% from Canada.

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The vice-governor of Mangistau Oblast, Rakymbek Amirzhanov, has confirmed that representatives of Iran and China have put both the countries forwards to take part in the construction of a fourth oil refinery.

Amirzhanov explained that Iran has expressed an interest in the project due to several factors: “In Iran, all the oil refineries are located in the north of the country. All the oil fields are located in the south. Iran spends about $35 per tonne of oil to transport crude from the south to the north of the country.” Kazakhstan, situated close to northern Iran, is therefore a good candidate for a new partnership in oil swaps.

The approximate minimum amount of investment in the construction of the project is estimated to be $6 billion. Chinese companies, however, are willing to enter the project with investments estimated at $5 billion.