Oil Chronicles
Oil Chronicles. September 2024
September

September 2, President Kassym-Jomart Tokayev of Kazakhstan delivered his annual Address to the Nation, outlining four key priorities for the country's oil and gas sector:
- Development of petrochemistry;
- Modernization of the gas transportation system to expand regional gasification;
- Exploration and development of new gas fields;
- Construction of new gas processing plants in Zhanaozen, Kashagan, and Karachaganak.
The President emphasized the urgent need to implement effective incentives to ensure the return on investments in the sector, including setting appropriate tariffs and wholesale prices. He noted that such measures are critical for attracting new investments, particularly in geological exploration of gas fields. Without these steps, ensuring sufficient gas volumes to support the economy would be impossible, according to Tokayev.
Tengizchevroil successfully completed its 2024 turnaround maintenance at the Tengiz field on schedule and within budget. The operations focused on two of the five production trains of the Complex Technological Lines (KTL-1). The previous major maintenance of KTL-1 occurred in 2019. The recent work spanned 3.6 mln man-hours and involved over 7,000 workers.
While the company did not disclose the production impact during the maintenance period, the Caspian Pipeline Consortium (CPC) reported a roughly 15% reduction in crude oil flow through the Tengiz-Novorossiysk pipeline in August. This reduction will help Kazakhstan offset its overproduction under the OPEC+ agreement.
Following negotiations between North Caspian Project partners, QazaqGaz, the Ministry of Energy, and PSA LLP, an agreement was reached regarding the terms of the sale and purchase of Kashagan Liquefied Petroleum Gas (LPG).
"According to the terms of the agreement, deliveries of Kashagan liquefied petroleum gas are planned for late 2025, with the project expected to reach its maximum design capacity of over 700,000 tons per year by 2027, following the completion of infrastructure upgrades," QazaqGaz stated.
Kazakhstan’s Ministry of Energy has requested that shareholders of the Kashagan project postpone planned maintenance, initially scheduled for October 2024, to the following year. According to Reuters, the ministry issued a letter to the North Caspian Operating Company (NCOC) seeking the postponement to avoid a domestic gas shortage. The maintenance was initially planned to last 28 days, starting October 2024.
Meanwhile, OPEC+ indicated that the primary production cuts to compensate for Kazakhstan's overproduction, amounting to 265,000 barrels per day, are scheduled for October, coinciding with the planned Kashagan maintenance period.
September 6, Karachaganak Petroleum Operating B.V. officially announced the commissioning of facilities under the first phase of the Karachaganak Expansion Project (KEP-1A). KEP-1A is the latest in a series of major projects successfully implemented by KPO to manage the gas factor and maintain the plateau of liquid hydrocarbon production. The successful completion of KEP-1A, including the construction of the fifth gas reinjection compressor, marks a new chapter in the history of Karachaganak and demonstrates KPO’s ability to execute world-class, highly complex projects, according to the consortium.
The significance of the fifth compressor lies in its ability to increase gas reinjection volumes, which will help sustain production levels at Karachaganak at 10-11 mln tons of liquids per year in the coming years. Installation work is currently underway on the sixth compressor.
Kazakhstan’s Ministry of Energy and the National Committee for Artificial Intelligence and Innovation Development announced the establishment of an acceleration group to implement AI solutions in the energy sector.
The group will bring together leading AI, data analytics, IT, and energy experts. It will focus on developing and deploying advanced technologies to revolutionize resource management, optimize production processes, and enhance safety in the energy industry.
The acceleration group includes IT leaders and AI experts from KazMunayGas, QazaqGaz, KazTransOil, Kazatomprom, KEGOC, National Information Technologies JSC, Samruk-Energy, Tengizchevroil, NCOC, KPO, KMG Engineering, KazNIGRI, and the Data Management Association Kazakhstan. The group is headed by Deputy Minister of Energy Bakytzhan Ilyas.
September 6, the deadline passed for the buyout offer by Birinshi Shina Company LLP, the majority shareholder of Condensate LLP, which owns a refinery in the West Kazakhstan region. The offer was made to other shareholders at 1,283.44 tenge per share. Earlier this summer, Birinshi Shina Company signed an agreement with Condensate LLP to supply 30,000 tons of gas condensate per month from Russia for processing, ensuring 90% utilization of the refinery’s capacity.
The refinery is located near the Karachaganak field, but stable raw material supply agreements between the refinery shareholders and the KPO consortium have not been reached.
September 6, KazMunayGas Chairman Askhat Khassenov held a meeting at the Aktau bitumen plant, owned by the Caspi Bitum joint venture, where he called for accelerating efforts to increase the plant’s processing capacity to 1.5 mln tons of crude oil per year. Upgrading the CDU-VDU unit will increase road bitumen production from 500,000 to 750,000 tons annually. Demolition work, followed by the installation of new equipment, is scheduled to begin in November-December.