Kazakhstan’s Ministry of Energy and Shell PLC are exploring further development options for the country’s offshore Kashagan and onshore Karachaganak fields, including the construction of two new plants to process the natural gas produced in the fields.
In a meeting on August 26, Almasadam Satkaliyev, Kazakhstan’s energy minister, met with heads of departments of Shell’s conventional oil and gas business and the operator’s Kazakhstani branches to discuss further plans for a 2.5 billion cubic meter per year gas plant for the Kashagan field and a 4.5 billion cubic meter per year plant for the Karashiganak field, the energy ministry said in a press release.
The talks took place amid the parties’ broader hopes to expand their existing strategic partnerships in the country and strengthen future cooperation in joint exploration of other geological projects in the region, Satkaliyev said.
Neither the Energy Department nor Shell provided further details on the outcome of the meeting.
Through its subsidiary Shell Kazakhstan Development BV, Shell holds a 16.81 percent stake in the North Caspian Sea PSA Consortium (NCPSA), which includes the Kairan and Aktoty fields as well as the Kashagan field, which lies in a water depth of three to four meters about 75 to 80 kilometers southeast of Atyrau in the northern Caspian Sea.
North Caspian Operating Co. BV operates the Kashagan field on behalf of NCPSA partners, which include Shell, Kazakh state-owned subsidiary JSC NC KazMunayGas (KMG), KMG Kashagan BV (16.88%), Eni SPA subsidiary Agip Caspian Sea BV (16.81%), ExxonMobil Corp. subsidiary ExxonMobil Kazakhstan Inc. (16.81%), TotalEnergies SE subsidiary TotalEnergies EP Kazakhstan (16.81%), China National Petroleum Corp. (CNPC), a subsidiary of CNPC Kazakhstan BV (8.33%), and Inpex Corp. subsidiary Inpex North Caspian Sea Ltd. (7.56%).
Onshore, Shell subsidiary BG Karachaganak Ltd. and Eni’s partner company, Agip Kazakhstan North Caspian Operating Co. NV (Agip KCO), each own a 29.25 percent stake in Karachaganak Petroleum Operating BV (KPO), the operator of the Karachaganak oil and gas condensate field, which covers an area of more than 280 square kilometers in northwest Kazakhstan near Aksai.
Shell and Eni jointly operate the Karachaganak field on behalf of KPO partners Chevron Corp. (18%), PJSC Lukoil (13.5%) and KMG (10%).
Suggested schedules
In its 2023 annual report, KMG describes the proposed Kashagan gas plant as part of the first stage of the field’s Phase 2 (2A) growth project, which broadly aims to increase combined oil and condensate production to a total of approximately 710,000 barrels per day over the next decade.
In particular, oil production would increase from 408,000 to 500,000 barrels per day by supplying raw gas to the planned gas processing plant, which is to have a capacity of 2.5 billion cubic meters per year, the report said.
The new Kashagan gas power plant is currently in the preliminary front-end engineering and design (FEED) phase and, if approved, would start operations in 2029-30, KMG said.
The preliminary construction cost is estimated at $3.2 billion. According to KMG, the planned Karachaganak gas-fired power plant, which will have a capacity of 4.5 billion cubic meters per year, is expected to be commissioned by 2028, subject to approval.
