Azernews.Az

By Aynur Jafarova

Kazakhstan, an energy-rich Caspian littoral state and one of the five Central Asian countries, has decided to develop its gas industry.

The concept for the development of gas industry will be developed by late 2014, Kazakhstan's Oil and Gas Minister Uzakbai Karabalin said on April 7.

The role of gas in the world energy balance will increase in 2030-2040, international experts believe. Therefore, the development of the gas industry is one of Kazakhstan's priorities.

Kazakhstan, which plans to produce 41 billion cubic meters of gas in 2014, is also interested in attracting foreign investment in the oil and gas industry.

To realize this goal, the country is expected to discuss preferences and privileges for foreign investors which aim to start geological explorations.

The volume of investments in Kazakhstan's oil and gas sector amounted to about $10 billion in 2013.

The U.S., China, and the European Union (EU) constitute the top 3 investors in that sector.

Oil production resumption at Kashagan may be postponed indefinitely

Kazakhstan produced 81.8 million tons of oil in 2013 and plans to produce 83 million tons of oil in 2014.

The country's production comes mainly from five onshore fields -Tengiz, Karachaganak, Aktobe, Mangistau, and Uzen - and two offshore fields - Kashagan and Kurmangazy - located in the Caspian Sea.

Kazakh geologists estimate Kashagan field's geological oil reserves at 4.8 billion tons.

The total oil reserves are 38 billion barrels (six billion tons), with a recoverable volume of about 10 billion barrels, the project operator says.

Natural gas reserves are estimated at over one trillion cubic meters.

Oil production in the field started on September 11, 2013, but had to be stopped on September 24 due to a gas leak in the onshore section of the gas pipeline running from Island D to the Bolashak onshore processing facility. The Department of Emergency Situations was immediately briefed on the regulations.

Production was resumed, but stopped again on October 9 when a gas leak was detected.

If cracks are found in the offshore section of the oil pipeline, the resumption of production at the Kashagan field may be postponed indefinitely.

There are some concerns about the possible existence of micro-cracks in the offshore section of the oil pipeline. If cracks are found in the onshore section of the pipeline, they can be fixed this year, but if cracks are found offshore, Kazakhstan would need navigation and re-laying of the pipelines, which will take longer.

Search for possible micro-cracks in the offshore section of the pipeline will be possible once the ice on the Caspian Sea melts, which is no earlier than May, 2014.

Kazakhstan has to redirect oil exports if Russia faces sanctions

One of the current problems in the country's energy industry is the imposition of possible sanctions against Russia by Western countries due to Russia's invasion and subsequent annexation of Ukraine's Crimea region.

More than 60 percent of Kazakh oil exports were transported via the pipelines through the Russian territory in 2013. If sanctions are imposed, Kazakhstan will have to redirect its oil exports via another route; therefore, the country's oil export will decline.

A possible way to transport the Kazakh oil is the Black Sea -by the Batumi port- and the Caspian Sea.