In the medium run, Kazakhstan intends to strike and commission both new and suspended gas fields. The infrastructure of gas distribution among the regions is expected to expand further, which will reduce coal consumption and benefit the environment. By 2030, Kazakhstan will cut its air pollutant emissions by 60 to 70 thousand tons per year, preliminary estimated. Magzum MIRZAGALIYEV, Vice-Minister of Energy of the Republic of Kazakhstan, will give us an insight into the development of the national gas sector and the current construction status of the Saryarka gas pipeline.
Could you please share the Ministry’s plans for bolstering the gas supply infrastructure in Central and Northern Kazakhstan?
The country witnesses a dynamic growth of gas consumption. To date, utility gas is accessible to 49.68% of the country’s population or about 9 million people. At year-end 2018, this indicator increased by 511,769 people. That way, we are working towards the strategic objective of stable supply of the domestic market with our own gas. Natural gas is delivered to 11 of the country’s 17 regions. However, the gas distribution infrastructure in Central and Northern Kazakhstan is still missing. In this regard, the head of state instructed us to build the Saryarka main gasline (Stage I, Kyzylorda-Astana Section) along the route Kyzylorda—Zhezkazgan—Karaganda—Temirtau—Astana. Thus we will make sure the population in the Central and Northern regions, including Astana, has access to gas.
To be specific, the pipeline construction will gradually distribute natural gas to 171 settlements (Astana, 119 in Karaganda Region and 51 in Akmola Region) along its route. Moreover, the number of new production facilities that use natural gas are expected to grow. 1,690 jobs will be created during the construction phase. The operational period will give rise to about 200 work positions. The shift to gas consumption in the Central and Northern regions will benefit the environment in Zhezkazgan, Karaganda, Temirtau and Astana, as well as replace coal heating. According to preliminary estimates, the level of air pollutant emissions will decrease by 60,000 to 70,000 tons per year by 2030.
What is the planned timeframe to run the Saryarka pipeline? What will be the consumption volume and how will industrial and civil gas supply be distributed?
As scheduled, the first phase construction of the Saryarka pipeline is to be completed in December 2019. The design, construction and phased commissioning of gas grids to be connected to the pipeline will start in 2019 and go further as funds are allocated by investors as well as the national and local budgets.
As specified in the project’s feasibility study, the annual consumption volume in Astana, Karaganda, Akmola Regions will be about 805 million cubic meters in 2025; in 2030, it will be as high as around 1.5 billion cubic meters per year. More accurate figures will be known when the design and estimate documentation for the gas infrastructure development in settlements along the Saryarka pipeline route is finally elaborated. In Astana, hot water boilers at CHPs 1, 2 and 3 will be supplied with gas in the first place.
Who will supply gas for the Saryarka pipeline? Is Karachaganak, being a gas-condensate field, a major gas supplier or will there be any swaps? What is the scheme of obtaining gas for the gas branch?
KazTransGas JSC, the national operator in the area of gas and gas supply, is engaged in wholesales of commercial gas in the domestic market for each region, city of national status and the capital.
The construction project of the Saryarka pipeline envisages to supply gas from the cluster of fields located in Western Kazakhstan (Karachaganak, Kashagan, Tengiz, Zhanazhol and Urikhtau) by connecting to the existing main pipeline Beineu-Bozoy-Shymkent in Kyzylorda region.
Could you please mention the investment amount? Where do the national interests lie in this project?
In August 2018, the State Commission for Economic Modernization approved and accepted the following financing scheme for the construction of the Saryarka pipeline: Samruk-Kazyna Fund and national holding Baiterek replenished the charter capital owned by the project company, AstanaGaz KMG, by 80.3 billion tenge (40,15 billion tenge each); 102 billion tenge were borrowed from the Eurasian Development Bank (51 billion tenge) and the Development Bank of Kazakhstan (51 billion tenge); Unified Accumulative Pension Fund JSC (UAPF) invested retirement assets in AstanaGaz KMG bonds to the amount of 85 billion tenge.
In August 2018, the State Commission for the Economic Modernization reviewed and approved the above scheme and terms of the project financing, including the use of anti-crisis funds and raising funds of UAPF JSC. In October last year, the project company’s charter capital was replenished, and in December the second part of the financing was performed with the use of UAPF JSC funds. The rest of the funds from the Development Bank of Kazakhstan and the Eurasian Development Bank is planned to be received in May-June 2019.
Please share the Ministry’s vision on the further development of the gas industry. Will new gas fields be stricken? What are the prospects for the application of gas produced at Kashagan?
Today, the gas sector in Kazakhstan and in the world is one of the most dynamically developing industries, as compared to oil and coal. Expanding opportunities of gas usage will put it and alternative energetics on a par with the main energy sources in the future.
Kazakhstan boasts the world’s 22nd and CIS’ 3rd largest gas reserves (after Russia and Turkmenistan). The approved recoverable reserves amount to 4 trillion cubic meters, including 2.2 trillion cubic meters of associated and 1.8 trillion cubic meters of non-associated gas.
During the years of independence, the level of gas production has increased more than six times, amounting to 55.5 billion cubic meters in 2018. In 2018, the main share of gas production was ensured by the following large fields: Karachaganak—34%, Tengiz—28% and Kashagan—14%.
The prospects for Kazakhstan’s gas industry are promising. In the medium-term, we plan to complete the formation of the EAEU (Eurasian Economic Union) common gas market and expand the opportunities for mutual gas trade by 2025.
By 2030, according to the general scheme, the share of the population having access to natural gas will grow from the current 49.68% to 56%.
In 2019, the liquefied gas market will be gradually deregulated. Sales will be implemented on electronic trading platforms. Given the high level of investment activity in the oil and gas sector, both new and suspended gas fields are expected to be stricken and put into operation in the medium run.
Among gas fields, the following ones can be noted: the Shagyrly-Shomyshty field (KazAzot LLP) with an annual gas production of 1 billion cubic meters, Sarybulak (Tarbagatai Munai LLP) with 505 million cubic meters, Amangeldy (AmangeldyGaz LLP) with 360 million cubic meters and Kzyloi (TetisAralGaz LLP) with 153 million cubic meters. All the gas produced in these fields will be upgraded to commercial quality and sold to consumers, except for a small amount to be inevitably burned and used for own technological needs.
The gas produced at Kashagan is planned to be used to increase the commercial gas volume to 2.4 to 2.6 billion cubic meters per year. Also, we are currently considering options for marketing of liquefied gas as a commodity product in the domestic market according to the Production Sharing Agreement.
