Kazakhstan Plans to Expand Karachaganak Oil Field

Kazakhstan's Prime Minister Olzhas Bektenov has insisted on the construction of two giant new liquefied natural gas plants

Olzhas Bektenov

Prime Minister of Kazakhstan Olzhas Bektenov met with Peter Costello, executive vice-president of the British energy company Shell, with whom he discussed “projects of expansion of the onshore oil field Karachaganak.” During the talks, Prime Minister Bektenov reiterated the goal of maintaining crude oil production at a minimum level of 11 million tons per year.

Karachaganak, located in northwestern Kazakhstan, is an extensive oil, condensate, and natural gas field. Since opening, production capacity has been steadily increased by installing new gas re-injection structures in addition to the existing ones. Karachaganak currently produces 49% of Kazakhstan’s total natural gas and 16% of its oil and other liquid hydrocarbons. The project is implemented by the international consortium Karachaganak Petroleum Operating BV, which includes Shell and ENI (29.25% each), Chevron (18%), Lukoil (13.5%), and Kazmunaigas (KMG) with a 10% stake.

To increase production, Costello responded to the Kazakh government’s request to install several new high-capacity compressors as soon as possible and to evaluate the construction – at the expense of shareholders – of a natural gas liquefaction plant with an estimated capacity of 4 billion cubic meters per year. In addition, Bektenov and Costello also discussed the current situation and prospects for the development of Kashagan, Kazakhstan’s second most important field located offshore in the Caspian Sea. In 2023, the Kashagan field produced 18.77 million tons of oil and 11.86 billion cubic meters of gas. Also in this case, Kazakhstan asked to build a gas processing plant. The Prime Minister of Kazakhstan emphasized that his priority is “to increase the participation of local players in the implementation of projects.”

Issues related to strengthening the production potential of hydrocarbon fields are always in the center of attention of the Kazakh authorities. On June 8 last year, Kazakh President Kassym-Jomart Tokayev and ENI CEO Claudio Descalzi met in Astana to discuss ENI’s current activities, future projects, and decarbonization initiatives in this Central Asian country. Descalzi illustrated to Tokayev ENI’s strategy to exploit the Karachaganak and Kashagan gas to meet the country’s needs, as well as to give further impetus to investments in renewable energy for the energy transition.

Following the meeting, Kazakh state-owned company Kazmunaigas, ENI’s Karachaganak partner, announced a joint project to build a 250 MW hybrid renewable gas-fired power plant in Zhanaozen, Mangistau region, enshrined in a signed agreement between the two companies. The project, the first of its kind in Kazakhstan, includes photovoltaic, wind, and gas power plants to produce and supply decarbonized and stable electricity to Kazmunaigas subsidiaries located in the area.

Il primo ministro del Kazakhstan, Olzhas Bektenov (a destra), ha incontrato il vicepresidente esecutivo della compagnia energetica britannica Shell, Peter Costello