Azernews.Az

By Aynur Jafarova

Kazakhstan needs to process associated petroleum gas produced from its large fields, particularly from the giant Kashagan field, for developing its national gas industry, Andrey Zauter, the Director of the Oil, Gas & Chemicals Department at Strategy Partners Group said on December 9.

"Associated petroleum gas in Kazakhstan's key fields is differentiated by an extremely high content of non-hydrocarbon compounds, such as hydrogen sulphide, which imposes obligations on its treatment process," Zauter added.

He also noted that the existing gas transfer infrastructure is designed for the transit of gas from Central Asia to Russia. "It is unable to supply gas to northern and southern Kazakhstan."

For the time being, the development of exports has no prospects, he believes.

"The deficit of marketable gas is forecast in Kazakhstan. Significant investments in gas transportation and gas processing infrastructure will be required to join the export markets," he said at a KazEnergy meeting in Astana.

"Incentives should be offered to support regional gas supply plans toward the goal of boosting gas production," he said. "Measures should be taken to prevent price hikes in 2015 in connection with the common economic space agreements. The production and processing of flare gas must be actively stimulated for further development of the gas industry."

Touching on Kazakhstan's oil sector, Zauter said extensive development is the most possible scenario for the country in the short term.

"The possible scenario for Kazakhstan's oil sector is the extensive development in the short term and gradual move toward efficient production," he said.

Zauter believes focusing on the development of large fields leads to decrease of investment volumes in exploration and reduction of resource bases.

"It is important to create stimulus for improving the effectiveness of exploration, production and processing, as well as lifting restrictions in the oil products markets to support the development of the oil industry," he said.

Zauter believes such a situation envisages the differentiation of tax payments depending on the parameters of the fields, as well as liberalization of oil processing and oil products markets.

Kazakhstan is among the top ten countries in the world in reserves that allows producing oil for at least another 50 years. There are also significant prospects of finding new reserves.

The country's largest hydrocarbon fields are Kashagan, Tengiz and Karachaganak.

Kashagan is one of the largest fields discovered in the past 40 years. Recoverable oil reserves of Kashagan are estimated at 11 billion barrels, whereas total geological crude reserves stand at 35 billion barrels. Besides, natural gas reserves are estimated at over 1 trillion cubic meters. The first well in the Kashagan field was reopened and first oil volumes were produced on September 11.

The Tengiz oil field is one of the deepest and largest oil fields in the world. Reserves of the deposit are estimated at 750 million to 1.1 billion tons (6-9 billion barrels) of recoverable oil.

Karachaganak is one of the world's largest fields. Its oil reserves amount to 1.2 billion tons, while those of natural gas are 1.35 trillion cubic meters.

Kazakhstan's proven oil reserves stood at 30 billion barrels in early 2013, according to BP. OPEC predicts Kazakhstan's oil production to hit 1.69 million barrels per day (bpd) in 2014 while according to EIA, this figure will stand at 1.65 million bpd in 2014.