Caspian region
A Brief Analysis of the Oil and Gas Industry of Atyrau Region
Nuguzhinova Asemkhan, Ibrashev Ersin, Analysts of the Analytics and Project Management Department of the Information and Analytical Center of Oil and Gas JSC
Oil and gas production
Atyrau region is rightfully considered the oil capital of Kazakhstan. The start of oil production in Kazakhstan is marked by the production field situated in Atyrau region. In 1899, at Karashungul field, located in this region, the first gush of oil was recorded, beginning the history of Kazakhstani oil.
The first oil in Kazakhstan, but on the commercial scale, was produced in 1911, at the Dossor field located in Atyrau Region.
Needless to say, production of hydrocarbons forms the economy of the region. The region ranks first in the production of oil in the country. In 2017, the region produced 42.39 mln tons of crude oil and gas condensate (49.2% of the total production in the country) and 20.92 bln cubic meters of gas (40% of total production in the country).
Tengiz field is located on the territory of Atyrau region, which is the deepest in the world giant oil field, the upper natural reservoir of which lies at a depth of about 4,000 meters (13,000 feet). Natural reservoir at Tengiz stretches for 19 km (12 miles) in length and 21 km (13 miles) wide, and the height of the oil-bearing formation is one mile. The field is developed by Tengizchevroil, which is a leader in oil production in the country.
Also, a gigantic offshore field Kashagan was discovered in the Atyrau region, it is located 80 km from Atyrau, in the northern part of the Caspian Sea. The field was discovered on June 30, 2000, with East-1 well. It is one of the largest fields in the world discovered in the past 40 years, as well as the largest offshore oilfield. Operator of the field is the international joint venture North Caspian Operating Company (NCOC).
Today. 28 companies are producing oil and gas in the region. In 2017, the largest volume of oil and gas condensate was produced by Tengizchevroil, which accounted for 67.7% of production in Atyrau region (28.69 mln tons), and 33.3% of the total production in the country.
The second place in oil production in the region following the results of the year belongs to the North Caspian Operating Company B.V. (hereinafter - NCOC), which accounted for 19.6% of production in Atyrau region (8.29 mln tons) and 9.6% of the total production in the country.
The third place goes to Embamunaigas JSC, which is accounted for 6.7% of oil and gas condensate production in the region and 3.3% of produced raw material in the country (2.84 mln tons).
Oil refining
The Atyrau Refinery is located in the region, which is the first refinery in the country. In 2017, the Atyrau Refinery processed 4,723.6 thous. tons of oil.
The Atyrau Refinery is located in the region, which is the first refinery in the country. In 2017, the Atyrau Refinery processed 4,723.6 thous. tons of oil.
The region also has two mini-refineries: Kulnafta LLP and Caspian Refinery Group LLP.
Kulnafta LLP was founded in October of 2010. The launch of the plant took place in the fourth quarter of 2012. In 2017, the refinery has processed 22.4 thous. tons of crude oil, producing 8.9 thous. tons of fuel oil and 6.7 thous. tons of diesel fuel, as well as 2.9 thous. tons of middle distillate.
Caspian Refinery Group LLP was founded in 2013.
Oil exports
The volume of oil exports from the region in 2017 amounted to 40.95 mln tons tons (58.7% of total oil exports from the country).
Also two export pipelines go through the territory of Atyrau region: Atyrau-Samara and Tengiz-Novorossiysk of the Caspian Pipeline Consortium.
Atyrau-Samara pipeline runs from Uzen to Atyrau Refinery and then connects with the system of Transneft oil pipelines in the direction of Samara. The pipeline specially heated using furnaces for high congealing oil of Zhetybai-Uzen fields group. According to KazTransOil JSC, Kazakhstan’s section of this pipeline can pump up to 16 mln tons of oil per year. The length of the pipeline is over 1,399 km.
At the Kazakhstani sector KazTransOil JSC is the operator, and Transneft PJSC at the Russian sector.
In 2017, Atyrau oil exports in this direction amounted to 24% (3.62 mln tons) of total exports on the pipeline (15.37 mln tons).
CPC pipeline system. According to the Consortium, the length of the pipeline that links the oil fields in Western Kazakhstan with the marine terminal in Novorossiysk is 1,511 km. CPC marine terminal is equipped with three single-point moorings (SPM) allowing to securely load tankers at a considerable distance from the coast, including under the adverse weather conditions.
Kulnafta LLP was founded in October of 2010. The launch of the plant took place in the fourth quarter of 2012. In 2017, the refinery has processed 22.4 thous. tons of crude oil, producing 8.9 thous. tons of fuel oil and 6.7 thous. tons of diesel fuel, as well as 2.9 thous. tons of middle distillate.
Caspian Refinery Group LLP was founded in 2013.
Oil exports
The volume of oil exports from the region in 2017 amounted to 40.95 mln tons tons (58.7% of total oil exports from the country).
Also two export pipelines go through the territory of Atyrau region: Atyrau-Samara and Tengiz-Novorossiysk of the Caspian Pipeline Consortium.
Atyrau-Samara pipeline runs from Uzen to Atyrau Refinery and then connects with the system of Transneft oil pipelines in the direction of Samara. The pipeline specially heated using furnaces for high congealing oil of Zhetybai-Uzen fields group. According to KazTransOil JSC, Kazakhstan’s section of this pipeline can pump up to 16 mln tons of oil per year. The length of the pipeline is over 1,399 km.
At the Kazakhstani sector KazTransOil JSC is the operator, and Transneft PJSC at the Russian sector.
In 2017, Atyrau oil exports in this direction amounted to 24% (3.62 mln tons) of total exports on the pipeline (15.37 mln tons).
CPC pipeline system. According to the Consortium, the length of the pipeline that links the oil fields in Western Kazakhstan with the marine terminal in Novorossiysk is 1,511 km. CPC marine terminal is equipped with three single-point moorings (SPM) allowing to securely load tankers at a considerable distance from the coast, including under the adverse weather conditions.
According to CPC, the Consortium shareholders are: the Russian Federation - 24%; KazMunayGas - 19%; Chevron Caspian Pipeline Consortium Company - 15%; LUKARCO B.V. - 12.5%; Mobil Caspian Pipeline Company - 7.5%; Rosneft-Shell Caspian Ventures Limited - 7.5%; CPC Company - 7%; BG Overseas Holding Limited - 2%; Eni International (N.A.) N.V. S.ar.I - 2% and Oryx Caspian Pipeline LLC - 1.75%.
To date, the expansion project is being implemented involving the growth of CPC pipeline system transmission capacity twice from what it has now, up to 67 mln tons of oil per year, which was originally set in the feasibility study of the CPC project in 1998.
On April 20, 2017, maintenance works on the oil pipeline system and new facilities constructed under the expansion project were carried out. Works were done at the all sites of the main oil pipeline, including oil pumping stations (OPS) and the marine terminal. In the Republic of Kazakhstan connection of the newly built A-OPS-3A to the main pipeline was carried out.
According to IACOG JSC, in 2017, oil exports of Atyrau region in this direction amounted to 37.27 mln tons (or almost 75% of the total exports via CPC pipeline).
The main companies exporting Atyrau oil via CPC are: Tengizchevroil LLP, North Caspian Operating Company B.V., and Embamunaigas JSC. According to the results of 2017, they account for 37.1 mln tons, which is nearly 100% of Atyrau oil exports in this direction, or 74.8% of the total transfer through the pipeline.
The three above-mentioned companies (Tengizchevroil LLP, North Caspian Operating Company B.V. and Embamunaigas JSC) are also major exporters of oil from the region. In 2017, collectively they shipped more than 39 mln tons for export (nearly 95.9 percent of oil exports of Atyrau region).
Summing up, Atyrau region ranks first in the production of oil and gas condensate, and natural gas, as well as in oil export among the regions of the Republic of Kazakhstan.
References:
1. The data from Information-Analytical Centre of Oil and Gas JSC
2. The data from the official website of Kazakhstan-China Pipeline LLP (www.kcp.kz)
3. The data from the official website of Caspian Pipeline Consortium (www.cpc.ru)
4. The data from the official website of KazTransOil JSC (www.kaztransoil.kz)
5. The data from the official website of Unified Electronic Trading Platform JSC (www.roseltorg.ru)
6. The data from the official website of Transneft PJSC (www.transneft.ru)
References:
1. The data from Information-Analytical Centre of Oil and Gas JSC
2. The data from the official website of Kazakhstan-China Pipeline LLP (www.kcp.kz)
3. The data from the official website of Caspian Pipeline Consortium (www.cpc.ru)
4. The data from the official website of KazTransOil JSC (www.kaztransoil.kz)
5. The data from the official website of Unified Electronic Trading Platform JSC (www.roseltorg.ru)
6. The data from the official website of Transneft PJSC (www.transneft.ru)