Shell Eyes Kazakh Gas Processing Plan

Kazakhstan's energy ministry, state producer KazMunaiGas, energy transporter KazTransGas and Anglo-Dutch major Shell have signed a memorandum of co-operation in the field of gas processing and petrochemicals market research. The energy minister Kanat Bozumbaev told reporters after the signing on September 6 that they would also consider the prospects for processing output from the Karachaganak field.

Shell's purchase of UK independent BG brought it a stake in the giant sour gas and condensates field. The gas is now delivered to Gazprom for processing at the Orenburg plant in southern Russia.

The study will also look at how to increase output from Kazakhstan's oil fields and technology transfer as well as the potential development of renewable energy projects, the report said.

"Our task is to thoroughly consider and with Shell’s help to decide in the near future whether the country should build some large petrochemical complex on the basis of Karachaganak, including gas processing, or stay with the same model, with which we work and process our raw materials," he said.

"Within the framework of the memorandum, we plan to cooperate in the field to explore the potential of existing oil and gas industry, continue to work together with Shell under the “road map” of the mining industry in Kazakhstan,’ said Kazmunaigaz CEO Sauat Mynbaev.

Shell is one of the largest foreign investors in the economy of Kazakhstan. The concern takes part in four projects: an agreement on the division of the North Caspian Sea production (with a share of 16.81%), a PSA to develop the license area Pearl in the Kazakhstan sector of the Caspian Sea (55%), the Karachaganak production-sharing agreement (29.25%), and the Caspian Pipeline Consortium (7.4%).  

Ilham Shaban