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A New Levy: upstream Developers Will Pay for Gas Supply Expansion in Kazakhstan

This is an abridged version. The full text is avaiable to subscribers to The Russian Energy weekly.

The government of Kazakhstan plans to supply natural gas to northern and central regions. The source is the Karachaganak field, where a gas processing facility is to be built. As a result, Gazprom’s Orenburg plant will be left without feedstock and the upstream operators will be forced to sell gas domestically at fixed prices.

‘Whatever It Costs’

Addressing the nations on January 27, President Nursultan Nazarbayev instructed the Cabinet of Ministers to finish the design and start building a gas processing plant at the Karachaganak field. He reiterated that the project would serve those regions of Kazakhstan that have had no access to centralized natural gas deliveries.

The facility, designed to treat 5 bcm a year, is to be built according to a feasibility study prepared by Eni, one of the partners in Karachaganak Petroleum Operating Company (KPO) consortium.

‘I order the government to start creating a gas pipeline system that will provide supply to the central region of the country including the national capital. We must ensure gas supply throughout the country whatever it costs,’ Nazarbayev declared.

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