Oil Chronicles. November-December 2022
November 1, five new compressor units were put into operation at the Kazakh Gas Refinery in the Mangystau region, which allowed a 20% increase in the volume of gas received for processing.
The commissioning of new compressors was carried out under the "Construction of a new compressor unit" project, according to the program adopted in January 2022, to ensure the reliability of the gas refinery's equipment for 2022-2025. It will ensure the smooth operation of the enterprise until the commissioning of the new GPP in Zhanaozen. The program includes measures to replace the technical and morally worn-out capacitive, column, pumping, and compressor equipment.
A new division, QazaqGaz Exploration and Production, has been created in QazaqGaz National Company JSC through the transformation of Amangeldy Gas LLP, Chairman of the Management Board of the national company Sanzhar Zharkeshov said.
According to the head of QazaqGaz, the company is working to increase the resource base and ensure the country's energy security. "QazaqGaz will increase its exploration assets. We will use our priority right to subsoil use to get about ten new projects to our portfolio. All new subsoil use projects will be consolidated in the QazaqGaz Exploration and Production structure," Zharkeshov said.
November 2-3, early construction and installation work began on the construction site of the butadiene and its derivatives production plant, KazMunayGas reports.
As known, in November last year, KMG and Tatneft created a joint venture, Butadiene LLP, which will be the operator of a project to develop a production of butadiene rubbers. The completion date is 2025. It is planned to produce five types of products – butadiene, styrene-butadiene-styrene (rubber on the road surface), divinyl-styrene synthetic rubber (rubber for the tire industry), isobutane-isobutylene fraction, methyl tert-butyl ether (additive for gasoline).
November 5, a contract for the purchase and sale of raw materials was signed between Butadiene LLP and Tengizchevroil LLP. TCO will supply 380 thousand tons of butane per year to the plant.
The project is being implemented on the National Industrial Petrochemical Technopark SEZ territory. It is planned that the plant will produce up to 186 thous. tons of rubbers and 170 thous. tons of isobutane per year. The project cost is $964 mln, of which Tatneft's investments are $723 mln. The plant is expected to generate $1.6 bln profit per year, and KMG's dividends will amount to $398 mln. Export revenue will amount to $478 mln per year, and tax revenues to the budget are $315 mln.
The share of participants in Butadiene LLP: Tatneft – 75% and KMG – 25%. KMG provides raw materials and infrastructure, and Tatneft is responsible for technologies, sales markets, and project financing.
November 7, Samruk-Kazyna and KMG announced their intention to carry out the first public offering of KazMunayGas JSC shares, within which the fund intends to offer up to 30,505,974 shares for sale, which is up to 5% of the total number of outstanding shares. The price for one share is 8,406 tenge.
November 7, Samruk-Kazyna, KazMunayGas and SIBUR Holding and the participants of the operating companies of the petrochemical projects Polypropylene and Polyethylene signed the main documents on the establishment of joint ventures based on KPI Inc. LLP and Sileno LLP.
The parties determined the terms of partnership in the joint venture located on the territory of the National Industrial Petrochemical Technopark SEZ in Atyrau. In particular, the mechanism of investment in the construction project of a plant for the production of polyethylene with a capacity of 1.25 mln tons per year and the procedure for the sale of finished products of a plant for the production of polypropylene with a capacity of 500 thous. tons.
November 8, the President of Kazakhstan launched the integrated gas chemical complex of Kazakhstan Petrochemical Industries Inc LLP in the Atyrau region.
This enterprise, specializing in processing raw materials from the Tengiz field, is designed to produce 500 thousand tons of polypropylene per year, which will amount to 1% of its global production. The production complex will not only cover the need for polypropylene in the domestic market but will also contribute to the activities of small and medium-sized enterprises producing polypropylene products for the construction and medical industries, the automotive industry, and the food industry.
The company uses Catofin and Novolen technologies of the American Lummus Technology Inc. Similar complexes operate only in five countries of the world – Saudi Arabia, the USA, Belgium, South Korea, and China.
November 8, during a working trip to the Atyrau region, the President of Kazakhstan instructed to build a large oil storage facility in the region.
"Today, we are forced to send oil for export because the technology requires it immediately. It is unacceptable to stop production. China has an excellent experience in this regard. Very large oil storage facilities have been built there, which allow meeting domestic needs for 3-4 months without additional supplies," Kassym–Jomart Tokayev said. He instructed KazMunayGas, considering environmental requirements, to review the construction of a large oil storage facility in the Atyrau region. The Ministry of Energy should negotiate with large oil companies on this account.
November 9, the trading systems of the Kazakhstan Stock Exchange KASE and the Exchange of the Astana International Financial Center began accepting applications for participation in the subscription to common shares of KazMunayGas as part of the IPO. Acceptance of applications for institutional investors ended at 6 pm Astana time on November 30, 2022, and for retail investors on December 2, 2022, at 3 pm Astana time.
KazMunayGas and Azerbaijan's SOCAR have signed a five-year agreement to transport 1.5 mln tons of oil through the Baku-Tbilisi-Ceyhan pipeline.
"Now we are working on which Kazakhstani oil companies will transport these volumes starting next year. We expect that the volumes will increase in the future. Since not only we but also Azerbaijan is interested in this," Deputy Chairman of the Board of KMG Dauren Karabayev said during the company's roadshow.
November 18, Kazakhstan Petrochemical Industries Inc LLP (KPI) plant in Atyrau sent the first container train (62 containers) loaded with polypropylene with a volume of 1.5 thousand tons for export.
At the same time, the first shipments to domestic processors of products RGK-Kaspiy, Universal, and Alfa Plast were launched. The plant plans to saturate the domestic market with polypropylene fully. The quality of the products is confirmed by the international company SGS, whose laboratory operates on the plant's territory.
November 24, KazMunayGas announced that it was the first in Kazakhstan to purchase I-REC (International Renewable Energy Certificate) and used them for 8.5 million kWh, corresponding to the expected electricity consumption by the central office of KMG in 2022.
KMG acquired certificates issued for a solar power plant in one of the country's regions. The International Renewable Energy Certification Platform started operating in Kazakhstan this year. The Ecojer Association was approved as the issuer of I-REC certificates, which maintains registrants' accounts in I-REC, verify documents confirming the origin of electricity from renewable energy sources, and issue certificates at the request of registrants.
November 24-25, Chairman of the Management Board of KazMunayGas Magzum Mirzagaliyev paid a working visit to Moscow, where he held several meetings with Russian partners.
In particular, at a meeting with CPC General Director Nikolay Gorban, issues of constructing a connecting pipeline between CPC (203 km) and KTO's Kasymov PS, with a length of 1.16 km, and supplies of new vessels for the maintenance of the CPC marine terminal were discussed.
In addition, meetings were held at Lukoil, where the implementation of joint projects on the blocks Zhenis and Kalamkas-Sea/Khazar was discussed. The topic of negotiations with Mikhail Karisalov, Chairman of the Board of Sibur Holding, was cooperation in the framework of projects for the production of polypropylene and polyethylene. The management of KMG informed the partners about the ongoing work related to the start of the design of the polyethylene production plant (Sileno JV).
November 25, the contracting companies of the Karachaganak project (Shell, Eni, Chevron, Lukoil, and KMG) and the Authorized Body (PSA LLP), with the support of the Ministry of Energy of Kazakhstan, signed an agreement on the authorization of the Karachaganak-1B Expansion Project (KEP-1B) and the final investment decision.
The KEP-1B project includes the construction of the sixth gas re-injection compressor, a gas drying unit, expansion of the collection system, and other related facilities. The purpose of the project is plateau extension at Karachagnak. Its implementation will bring additional dividends to the Republic of Kazakhstan and its partners in the Karachaganak project.
KEP-1B is a logical continuation of several significant projects implemented at Karachaganak a few years earlier, namely the removal of production restrictions on gas (completed in 2021), the construction of the 4th gas compressor (completed in early 2022), and KEP-1A, which is at the stage of implementation following a plan.
November 28, TotalEnergies signed an agreement to sell its branch of Total E&P Dunga GmbH to the Kazakhstani Oriental Sunrise Corp Ltd for 330 million US dollars. Total E&P Dunga GmbH owns a 60% operating stake in the Dunga onshore oil field in Western Kazakhstan, where production volumes in 2022 amounted to about 7,400 barrels of oil equivalent per day. The deal is subject to the approval of the authorities of Kazakhstan and the partners' waiver of pre-emptive rights.
November 29, during the official visit of the President of Kazakhstan Kassym-Jomart Tokayev to France, during a meeting with representatives of French business circles, a cooperation agreement was signed between KMG and Air Liquide Eastern Europe S.A.
According to the document, a project to construct a new hydrogen production unit at the Pavlodar Petrochemical Plant to produce 160 thousand tons of winter diesel fuel per year will be worked out based on the Air Liquide Munay Tech Gases LLP joint venture. This will increase the conversion rate from 84.2% to 88.3%. The estimated cost of the project is 60 mln euros.