Energy ministry reveals cost of the biggest oil projects in Kazakhstan

The combined cost of the three biggest oil and gas projects is estimated at $13.4 billion, according to the draft development plan for the oil and gas industry for 2023-2027.

For instance, Silleno LLP, the joint venture by KazMunayGas (KMG) and Russian Sibur, has invested $7.6 billion in a polyethylene plant in the National Industrial Petrochemical Technopark. The plant is expected to produce 1.25 million tons of the product starting in 2028.

KazMunayGas is also going to build an $800 million butadiene plant in conjunction with Russian Tatneft. The new facility should start its operation in 2025.

In Shymkent, KMG and Chinese CNPC are going to allocate $5 billion for the expansion of the Shymkent refinery’s capacity from six million tons to 9-12 million tons of fuel per year. The Ministry of Energy of Kazakhstan is already preparing a road map for the project. This process includes a feasibility study, an EPC contract and negotiations with CNPC and Chinese state agencies.

The petrochemical industry of Kazakhstan is capable of producing about 1.35 million tons of aromatic hydrocarbons (benzol, paraxylene), polypropylene, lubricants and methyl tert-butyl ether per year.

Together with Russian Lukoil Kazakhstan’s government is also pursuing the implementation of three big oil fields on the Caspian Sea: Zhenis ($4.2 billion) and Kalamkas Sea and Khazar ($6.6 billion for both). In a separate case, KMG and Tatneft have agreed to invest $2.4 billion in the Karaton-Sarkamys project, which is located near the working oil fields Tengiz and Korolevskoe.

Tengizchevroil has invested approximately $46.7 billion in the Future Growth Project – Wellhead Pressure Management Project (FGP – WPMP). By now, the project is 96.7% ready. WPMP facilities are expected to begin operations in December 2023, while FGP facilities will start in June 2024.

According to the Ministry of Energy, there are 295 working oil fields in Kazakhstan. Many of them reported high-speed depletion of oil reserves as the age of easily accessible and abundant oil reserves is coming to an end. Even though there are plenty of other oil fields in Kazakhstan, the process of oil extraction is becoming more complicated. Experts believe there are about 40 billion tons of oil in such deposits but they aren’t that attractive to investors as their exploitation would require a lot of investments. The three biggest oil fields – Tengiz, Karachaganak and Kashagan account for 60% of the oil produced in the country.