The Minister of Energy of the Republic of Kazakhstan, Bolat Akchulakov, spoke about the activities of the Ministry of Energy and the main indicators of the oil and gas industry in the region during a public meeting in the Atyrau region on August 12, 2022.

According to the minister, in the Atyrau region in 2021, oil production was 48 million tons. 27.7 million tons of oil were produced in 7 months of 2022. The volume of gas production was more than 24.9 billion m3 or 103% by 202014.4 billion m3 or 101% of the same period of 2021 was produced in 7 months of 2022.

More than 30 companies operate in the region, which provide 55% of all production in the country. The main share of production comes from the major fields Tengiz and Kashagan.

The Future Expansion Project, the largest project in the history of independent Kazakhstan, is being implemented at the Tengiz field and is scheduled to be completed in 2024, which will increase production by 12 million tons per year.

In 2021, the construction of a gas processing plant at the Kashagan field with a capacity of 1 billion m3 began, which will increase production in 2024 to 450 thousand barrels per day. When the plant reaches its full capacity, it will produce 750 mln m3 of marketable gas, 120,000 tons of liquefied gas, 14,000 tons of condensate and 212,000 tons of sulfur.

Besides, it was decided to start the planning of the Kashagan Gas Refinery with a capacity of 2 billion m3/year, which will make it possible to increase production in 2027 to 500,000 barrels a day.

Implementation of these projects is expected to increase oil production from 16 to 20 million tons per year.

In Atyrau region gas production is carried out by 21 gas producing subsoil users. The level of the gasification of the region's population is 98.7% or 660,000 inhabitants are supplied with natural gas.

In his speech, Bolat Akchulakov noted that the final price of natural gas in the Atyrau region, which is approved by the Ministry of National Economy, is 5.3 tenge per m3, and for recipients of targeted social assistance is 4.2 tenge per m3, which is the lowest in the country.

The approved national budget for 2022 under the budget program 003 provides for an amount of 1.0 billion tenge for the implementation of 3 new projects. These are gas supply to Kyzyl uy and Zhaskairat villages of Isatay district of Atyrau region, as well as construction of gas pipelines to Taskudyk, Sorkol, Sarkumak, Bylkildakty, Konyrauly, Kenbay settlements of Kyzylkoginsk district of Atyrau region.

The implementation of these projects will provide infrastructure and gas for about 1,300 people.

In addition, as part of the Head of State's instruction, the construction of the Makat-North Caucasus gas trunkline investment project, which will allow transporting additional amounts of natural gas, taking into account the growing demand of the region, is being implemented.

The total subscription bonus amounted to 2.4 billion tenge on 4 subsoil areas in the Atyrau and border regions

"The region has 118 fields in Kazakhstan, 78 hydrocarbon contracts have been signed. As of today, the recoverable oil reserves are about 3.3 billion tons and gas reserves are more than 200 billion m3," Bolat Akchulakov noted.

In 2022, an auction was organized for the granting of subsoil use rights for hydrocarbons in 4 subsoil areas located in the Atyrau and bordering Mangystau and Aktobe regions.

The final subscription bonus amounted to about 2.4 billion tenge, which is about 10 times more than the initial subscription bonus.

Also in the short term prospecting works on these subsoil plots are planned, the volume of investments will make up 5,3 billion tenge.

As of today the Ministry has prepared a package of legislative amendments to implement the mechanism of Enhanced Model Subsoil Use Contract which provides for regulatory and fiscal preferences in the form of tax exemptions within the commission of the Head of State Kassym-Jomart Tokayev. These amendments to the legislation will be adopted by the end of this year, which will give impetus to the development of new fields.

The order of the Ministry of Energy preserves the state regulation of the maximum prices for retail sales of AI-80, 92-93 and diesel fuel

As of today, the average price of AI-92 gasoline is 169 tenge and diesel fuel 230 tenge per liter in the Atyrau Region.

Pricing of AI-95 is given to the competitive environment and determined by the market, as the production of AI-95 and above, requires a large consumption of expensive imported additives and high-octane components, prices correlate with oil prices and exchange rates.

In addition, as part of the execution of the order of the Head of State Kassym-Jomart Tokayev to reform the market of combustible and lubricating materials, the following measures are taken:

• ensuring visibility and transparency in the production and distribution of petroleum products;
• an order to extend the prohibition on the export of petroleum products by motor vehicles until the end of 2022 was adopted;
• preventing a shortage of diesel fuel through the development of differentiated prices.

The Ministry has now developed and published a draft order on the official Internet resource and the Open Legalacts portal, which provides a differentiation of prices for diesel fuel, depending on residency and type of transport.

The maximum retail price of liquefied gas in the Atyrau region is 50 tenge per liter.

"There are about 95 automobile gas-filling stations and 29 organizations in the Atyrau region sell liquefied gas," Bolat Akchulakov said.

 

The Ministry of Energy of the Republic of Kazakhstan has adopted an order to partially compensate for the losses of plants-producers to approve the marginal wholesale price at 33,600 tg/tonne (19.7 tenge/litre), which will ensure fair distribution of income between producers and sellers of LPG, as well as to encourage plants to produce LPG.

In addition, the Agency for Protection and Development of Competition preserved the state regulation of prices and approved the maximum retail price of LPG until the end of 2022, according to which the maximum retail price of LPG in the Atyrau region is 50 tenge per liter.

LPG consumption in the region in 2021 amounted to about 50 thousand tons. In the first 7 months of 2022 consumed about 36 thousand tons.

The Head of the Ministry noted that the Ministry of Energy is taking measures to re-engineer the distribution of LPG in the regions to ensure long-term price stability and to prevent speculative price hikes.

Development of rules will be one of such measures to determine the marginal wholesale prices of liquefied petroleum gas by producers based on the established retail prices, which will ensure a fair distribution of income among market participants, as well as to encourage plants to produce LPG.

In the Atyrau region, the project The Strengthening Energy System in the Western Zone of UES of Kazakhstan is being implemented.

"Electricity supply of Atyrau and Atyrau region is provided mainly by Atyrau Cogeneration Plant and the gas turbine power plant of Karabatan Utility Solutions LLP," Bolat Akchulakov said.

The region generated 4.268 billion kWh of electricity in the first 7 months of 2022, while the volume of domestic consumption of the region is 3.9 billion kWh.

In order to ensure quality and timely preparation of the Atyrau region for the upcoming heating season, work is being done to repair 3 boiler units and 2 turbine units of Atyrau Cogeneration Plant JSC, 13.2 km of heating networks.

Today, West Kazakhstan and Atyrau regions are connected by 220 kV power transmission line with a capacity of 100 MW. When this line is taken out of service, the energy systems of Atyrau and Mangystau regions switch to isolated operation, which negatively affects the reliability of electricity supply to consumers.

The Strengthening Energy System in the Western Zone of UES of Kazakhstan project is being implemented in order to solve this problem. The construction of power grid facilities will increase the capacity and reliability of power supply to consumers in the Atyrau region. The project is planned to be completed in 2024.