Satkaliyev: It is planned to implement large strategic infrastructure projects for uninterrupted gas supply to population

The Minister of Energy Almassadam Satkaliyev reported on the current state and prospects of the gas industry at the Government session.

As the Minister noted, the production plan for 2024 is 60.5 billion m3, which is 2.3% more than the volume of 2023. Gas production in the first half of 2024 amounted to 30 billion m3, which is 50% of the plan for 2024.

The main increase in gas production is expected to come from large fields such as Karachaganak, Tengiz and Kashagan.

"The volume of marketable gas production for 2023 amounted to 29.8 billion m3. In the first half of this year, 14.9 billion m3 was produced, which is 50% of the plan for 2024," Satkaliyev reported.

Of the total volume of marketable gas, 19.4 billion m3 was supplied to meet the needs of the domestic market in 2023. The projected volume of consumption for 2024 is about 20.9 billion m3.

For 2023, the volume of liquefied petroleum gas production amounted to 1.6 million tons. The plan for 2024 is 1.6 million tons. In the first half of 2024, 0.8 million tons have already been produced, which is 53.3% of the plan.

According to the Minister, the dynamics of increasing the resource base of marketable gas from 2023 to 2030 has also been determined.

According to the forecast balance, the volume of marketable gas production is steadily increasing. It is expected that from 22.5 billion m3 in 2023 the increase by 2030 will be 1.6 times, up to 36.6 billion m3.

As part of attracting investments in exploration and development of new gas fields, QazaqGaz and Chevron signed an Agreement on joint realization of geological exploration works at Zhalibek area in Aktobe region

“In the period from 2026 to 2030 will begin phased commissioning of four gas processing plants: on the basis of raw materials of Kashagan field with capacity of 1 billion and 2.5 billion m3/year, Karachaganak field with capacity of 4 billion m3/year, as well as KazGPZ plant in Zhanaozen with capacity of 900 million m3 /year," Satkaliyev reported.

Also according to him, for the construction of gas processing plants on the basis of raw materials from the Kashagan field attracted Qatari investor UCC Holding.

Currently between NC “QazaqGaz” and UCC Holding are negotiating the final conditions for the implementation of these projects.

Implementation of the Karachaganak GPP construction project will be carried out at the expense of the operator. In February of this year the acceptance of documents for participation in the EPC tender was finalized. At present, the evaluation of tender bids of potential suppliers is underway.

According to the minister, one of the priority tasks of the agency is gasification of the country and development of the gas transportation system.

"According to the results of 2023, 60% of the country's population or about 12 million people have access to gas. In order to continue gasification this year, 89.3 billion tenge was allocated from the national budget. Within the framework of the Action Plan of the Government allocated an additional 105.4 billion tenge, which will provide gas to more than 300 thousand people and modernize more than 1,700 km of gas networks,” Satkaliyev said.

According to him, for uninterrupted supply of gas to the country's consumers it is planned to implement major strategic infrastructure projects, including construction of the second string of the main gas pipeline “Beineu - Bozoi - Shymkent”, as well as construction of the main gas pipelines “Aktobe - Kostanai” and “Taldykorgan - Usharal”.

In addition, work is underway to fully utilize the gas transit potential of the country. Thus, in October last year the transit of Russian gas to Uzbekistan was launched.

In 2023, 1.28 billion m3 will be transported, this year it is planned to increase to 3.8 billion m3.

Transit of Turkmen and Uzbek gas to the People's Republic of China shows steady growth. In addition, the issue of increasing the transit of Russian gas to Kyrgyzstan is under discussion.

As for prices, according to the minister, today the average cost of commodity gas is 33,169 tenge per 1,000 m3 at the approved wholesale price for commodity gas of 23,646 tenge.

“In order to attract investment in the gas industry and to achieve the cost price of marketable gas requires a gradual increase in gas prices, taking into account the prevention of sharp rise in prices for the population," Satkaliev said.

According to him, from July 1, 2024 the marginal prices of wholesale sales of marketable gas in the domestic market of the Republic of Kazakhstan with an average increase of 14.6%.

In general, within three years it is planned to achieve break-even gas sales in the domestic market, which will cover the growing demand for gas in the country and realize important investment projects for our country.

As for the development of gas chemical industry, the Minister noted that today the issue of implementing projects for urea and ammonia production with a total cost of $2.7 billion is under consideration. The projects for the production of urea and ammonia with a total cost of $2.7 billion and the creation of 1.2 thousand jobs.

In the near future it is planned to extract all the necessary fractions from commercial gas of Tengiz field, which will allow to realize the largest project “Polyethylene”.

In the future, an important issue is to extract the necessary fractions from the Kashagan field, which will attract new investments in oil and gas chemical projects.

At the same time, a distinctive feature of gas from Kazakhstan's large fields is the high content of so-called “fat” fractions of ethane, propane, butane necessary for the oil and gas chemical industry.

Almassadam Satkaliyev reported that quarterly distributed to the regions about 360 thousand tons of liquefied gas. However, the volume of quarterly production and distribution is initially less than the needs of the regions by 130 thousand tons or 26%.

"According to the Ministry of Internal Affairs of the Republic of Kazakhstan, in 2023, the number of gas-powered vehicles amounted to 582 thousand units or 18% increase compared to 2022. Due to the establishment of a low level of prices for liquefied gas, there is a transition of motorists of the country to this type of fuel, which in turn is the reason for the increase in consumption," Satkaliyev said.

According to him, the analysis of consumption shows an increase in demand for liquefied gas by regions, especially in border regions. Part of the volumes of liquefied gas distributed by the Ministry is directed to industrial enterprises producing petrochemical products for the development of the petrochemical industry.

“Liquefied petroleum gas is not used as a fuel anywhere in the world, but is used as an important element in obtaining products with high added value," Satkaliyev said.

According to him, three plants for the production of polypropylene and methyl tert-butyl ether using liquefied petroleum gas (LPG) as raw material are operating in the country today. Total investments amounted to 2.7 billion dollars, 1.7 thousand jobs were created.

The company is also working on the realization of a project for the production of butadiene, for which it is planned to supply raw materials - butane from the Tengiz field. The cost of the project will amount to $1.4 bln, 750 permanent jobs will be created, and up to 3 thousand jobs will be created in related industries

The projects on production of alkylate and polypropylene have been worked out, where it is planned to invest $300 million and create 2 thousand jobs.

These investment projects require LPG in the amount of 345 thousand tons/year.

“Given the importance of LPG in the implementation of projects of oil and gas chemical industry, we consider it necessary to fix the strategic direction of LPG on oil and gas chemical industry in the system of state planning,” Satkaliyev said.

Separately, the Minister dwelled on the issues of preparation of the gas transportation system for the heating season of 2024-2025 in order to provide NC “QazaqGaz” JSC with gas without failures and uninterrupted supply.

"Three underground gas storages Bozoi, Akirtobe, Poltoratskoye, which will serve as a buffer during winter peak consumption periods, are being filled with gas. Work is also underway to replace 182 defective pipes," Satkaliyev said.

According to him, work is underway on the distribution gas pipelines to repair equipment and inspect gas pipelines. In general, the preparation of the gas transportation system for the winter season is carried out according to the schedule and is planned to be completed by September 15 this year.

The Minister reported that within the framework of realization of the instructions of the President of the Republic of Kazakhstan a set of measures was developed to increase the efficiency of management and improve the quality of services in the gas sector.

Among them - approval of norms of consumption of commodity gas for household consumers. This measure is aimed at ensuring fair and transparent accounting of gas consumption, which contributes to effective management of resources and fair distribution of costs among the population.

A measure is envisaged to automate gas metering by installing gas meters with remote data transmission. The introduction of modern gas metering technologies will improve metering accuracy, reduce maintenance costs and improve control over gas consumption.

It is also envisaged to establish long-term prices for wholesale sales of marketable gas for oil and gas chemical projects. This decision is aimed at supporting and developing the oil and gas chemical industry, ensuring price stability and predictability of raw material costs for long-term planning and investment attractiveness of projects.

In addition, simplification of the procedure for transfer of gas supply facilities from state ownership to the balance of NC “QazaqGaz” JSC will accelerate the transfer processes, improve the efficiency of gas distribution networks management and ensure quality and reliable gas supply to the population and industrial enterprises.

#Energy #Government session #Ministry of Energy #Oil & Gas

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