Kazakhstan, Shell discuss new gas plants for Kashagan, Karachaganak fields

Kazakhstan’s Ministry of Energy (MOE) and Shell PLC are weighing further development opportunities for the country’s offshore Kashagan and onshore Karachaganak fields, including construction of two new plants for processing natural gas volumes produced at the fields.

In a meeting on Aug. 26, Almasadam Satkaliyev, Kazakhstan’s minister of energy, met with division heads of Shell’s conventional oil and gas business and the operator’s Kazakhstan in-country operations to discuss advancing plans for a 2.5-billion cu m/year gas plant for Kashagan field and a 4.5-billion cu m/year plant for Karashiganak field, the MOE said in a release.

The discussions came as part of the parties’ broader hopes to expand their existing strategic partnerships within the country, as well as strengthening future cooperation on joint exploration of other geological projects in the region, Satkaliyev said.

Neither the MOE nor Shell revealed further details regarding outcomes of the meeting.

Through subsidiary Shell Kazakhstan Development BV, Shell holds a 16.81% interest in the North Caspian Sea PSA Consortium (NCPSA), which—in addition to Kairan and Aktoty fields—includes Kashagan field located at water depths of 3-4 m, about 75-80 km southeast of Atyrau in the north Caspian Sea.

North Caspian Operating Co. BV operates Kashagan field on behalf of NCPSA partners that, alongside Shell, also includes Kazakhstan’s state-owned JSC NC KazMunayGas (KMG) subsidiary KMG Kashagan BV (16.88%), Eni SPA subsidiary Agip Caspian Sea BV (16.81%), ExxonMobil Corp. subsidiary ExxonMobil Kazakhstan Inc. (16.81%), TotalEnergies SE subsidiary TotalEnergies EP Kazakhstan (16.81%), China National Petroleum Corp. (CNPC) subsidiary CNPC Kazakhstan BV (8.33%), and Inpex Corp. subsidiary Inpex North Caspian Sea Ltd. (7.56%).

Onshore, Shell affiliate BG Karachaganak Ltd. and partner Eni subsidiary Agip Kazakhstan North Caspian Operating Co. NV (Agip KCO) each hold a 29.25% interest in Karachaganak Petroleum Operating BV (KPO), operator of Karachaganak oil and gas condensate field, which covers an area of more than 280 sq km in northwest Kazakhstan near Aksai.

Shell and Eni jointly operate Karachaganak field on behalf of fellow KPO partners Chevron Corp. (18%), PJSC Lukoil (13.5%), and KMG (10%).

Proposed timelines

In its 2023 annual report, KMG the proposed Kashagan gas plant comes as part of the first leg of the field’s second-phase (2A) growth project, which broadly aims to increase combined oil and condensate production about 710,000 b/d total during the next 10 years.

Oil production specifically would rise to 500,000 b/d from 408,000 b/d by supplying raw gas to the planned 2.5-billion cu m/year gas processing plant, according to the report.

Currently in the preliminary front-end engineering and design (FEED) phase, the new Kashagan gas plant, if approved, would reach startup in 2029-30, KMG said.

Estimated at a preliminary construction cost of $3.2 billion, KMG said the proposed 4.5-billion cu m/year Karachaganak gas plant project, pending approval, is scheduled for commissioning by 2028.