Kashagan Oil Production to Resume

Kashagan Oil Production Resume
Kashagan Field. Source: Petrocouncil.kz

Kazakhstan expects Kashagan oil production to resume by the end of October as the Caspian Pipeline Consortium also reopens mooring terminals.

Kazakhstan’s Energy Minister Bolat Akchulakov told Reuters on the sidelines of the Russian Energy Week in Moscow earlier in October that Kashagan would resume production of 400,000 barrels per day (bpd) by the end of October after maintenance.

Akchulakov also said that all three mooring points at the Black Sea terminal of the Caspian Pipeline Consortium (CPC) will also likely resume operations before the end of October.

Production at Kashagan declined on Aug. 3 because of a gas leak at the Bolashak oil and gas treatment facility. Kashagan had planned to boost output to 500,000 bpd after upgrades.

The North Caspian Operating Company (NCOC) operates the ultra-shallow water North Caspian Project in the Kazakh sector of the Caspian Sea.Partners in the Kashagan consortium includes Eni, ExxonMobil, CNPC, Shell, TotalEnergies, Inpex, and Kazakh state energy firm KazMunayGaz.

The project includes three fields: Kashagan, Kairan and Aktoty. The giant Kashagan field ranks as one of the largest oil discoveries of the past four decades, with approximately 9-13 billion barrels (1-2 billion tonnes) of recoverable oil. The Kashagan reservoir lies 80km offshore from the city of Atyrau in 3-4 meters of water, and is more than 4km deep (4,200 meters).

Kashagan oil field
Source: NCOC

Commenting to Reuters at the annual Moscow industry gathering, Akchulakov said that “production at Kashagan has been curtailed due to some ‘nuances’ with the equipment. We are conducting repair work. In September, Akchulakov had preducted that Kashagan would return to usual output “in October at best”, while CPC was seen resuming full operations before Oct. 10-15.

Akchulakov also told Reuters that Kazakhstan currently exports some 11-11.5 million tonnes of oil per year to China, with pipeline capacity of 20 million and that these export volumes “could be raised … if there is a wish.”

While Kashagan’s production is being restored, plans for the North Caspian Project to begin full scale development may be delayed while safety protocols are reviewed, according to Petrocouncil.kaz, a public-private consultative and advisory group.

Known also as the Oil and Gas Industry Strategic Development Council, the organization includes legal entities that coordinates all unions, councils and other alliances affiliated with The National Chamber of entrepreneurs “Atameken”. Participants include KazEnergy, The Ministry of Energy, Ministry of Investment and Development, PSAs and other organizations.

In late August, Petrocouncil.kz published an article on its website stating that equipment failures were due to errors made “at the stage of construction of the plant”, suggesting that “a complete revision of the entire Bolashak production facility may be required.”

Petrocouncil.kz cited industry sources as saying that at least two events occurred at the project this year which demonstrated problems with the operation of the facility. In one instance, wrapping paper that should have been removed at installation was found in one of the gas re-injection compressors.

In a second incident, a slug catcher pipe cracked because of corrosion. “This pipeline was found to have failed the Sulfide and Hydrogen Stress Corrosion Cracking test (SSC and HIC). They are not listed in the factory test certificate and such tests must be made by the manufacturer.

“The same thing happened with pipelines that broke back in 2013. Then the pipelines connecting Kashagan and Bolashak failed as a result oil production that had just begun was stopped for 3 years, until November 2016.

Given the emerging risks the republic may strengthen control and requirements for this work. The incident demonstrated that a full examination of industrial safety is needed both onshore and offshore, the consultative body stated in the article.

In 2021 NCOC reported the successful completion of its pilot development period and production increased to 400,000 bpd. A plan for the full-scale development of Kashagan has been approved and the implementation of the second stage of the field development by 2030 should increase production to 700,000 barrels per day. There is an agreement with a third party (QazaqGaz) on the processing of raw gas. It remains only to start the project, according to Petrocouncil.kz.