MANY DIRECTIONAL EXPORT POLICY OF KAZAKHSTAN
Kairgeldy M. Kabyldin, Managing director on infrastructure of transportation and service project
"National Company Kazmunaygaz" CJSC
What is the volume of oil consumed and exported in Kazakhstan and to which countries is the oil exported?
Oil production volume in Kazakhstan is steadily growing - in 2002 47.2 mln. ton oil and condensate was produced and home consumption of Kazakhstan was 7.8 mln. ton.
In future we intend to increase oil production. In 2003 52 mln. ton oil is expected to be produced. In 2010 production volume will equal to 118 mln ton, and by 2015 - 180 mln ton annually.
From the produced oil volumes in 2002 39.4 mln ton oil was exported, and all functioning directions were used:
- Northern - through pipeline Atirau-Samara and further though Russian pipeline system as well as through railroad system to European countries;
- Western - through pipeline KTK and tankers from port Aktau to ports Baku and Makhachkala;
- Southern - oil delivery with tankers from Aktau to Iranian port Neka within the frame of replacement (swop-operation) Iranian oil delivery from Persian Gulf.
What is the near future of Kazakh oil-gas export lines? Kazakhstan exports and plans to export hydrocarbons, which of them will be used in the first place? What are the plans concerning cooperation with oil and service companies of Azerbaijan, Russia, Turkmenistan, Iran?
In the short-term perspective, within the frame of oil pipeline system development plan our main task is to increase capacity of KTK and Atirau-Samara pipeline.
At present considerable volume of Kazakh oil is exported through pipeline Atirau-Samara. In summer of 2002 Kazakhstan and Russia signed long-term agreement on oil transit, under which we are guaranteed an opportunity of transit in the direction Atirau-Samara at the volume not less than 15 mln. ton annually (in the direction Makhachkala-Novorossiysk - not less than 2.5 mln ton annually). We plan step-by-step increase export pipeline Atirau-Samara throughput capacity up to 25 MTG for export of growing volumes of Aktubink and Kumkolsk regions oil (and perhaps Caspian oil) through CIS countries' pipeline systems (Baltic pipeline system and "Drujba" and "Adria" pipeline system).
Pipeline of Caspian Pipeline Consortium, the exploitation of which launched in October 2001, actively functions. At present throughput capacity of KTK Kazakh part is 22 mln ton annually (total - 28.2 MTG), stage-by-stage increase of Kazakh part of pipeline capacity to 51 mln ton is planned (total - up to 67 mln ton). In 2002 12 mln ton oil was exported. In 2003 over 16 mln ton is planned to deliver though KTK pipeline.
Besides, in near perspective we plan to expand port Aktau capacities.
In long-term perspective we consider export projects of the below pipelines:
Creation of transport system Aktau-Baku-Tbilisi-Ceyhan; Project "Pipeline "Kazakhstan-China";
Creation of transport system Aktau-Baku-Tbilisi-Ceyhan
Nursultan Nazarbayev, President of Kazakhstan Republic declared Baku-Tbilisi-Ceyhan pipeline next priority in the sphere of Kazakh multivectoral pipeline infrastructure. This direction is considered as unique transport corridor with two transport systems Aktau-Baku abd Baku-Tbilisi-Ceyhan. At present inter-governmental agreement between Azerbaijan and Kazakhstan, which is necessary for creation of appropriate legal basis and favorable investment climate for transport system Aktau-Baku, is being prepared.
In September 2002 construction of Baku-Tbilisi-Ceyhan pipeline launched, and will be finished by 2005. project capacity of pipeline is 50 mln ton annually.
At present companies operating in Kazakhstan - Kashagan project participants: "ENI", "Total", "INPEX" and "ConocoPhilips" acquired in total 15% shares in BTC project, which provides Kazakh oil transportation in this direction.
At present activities conducted by ZAO "NK "KazMunayGaz" is aimed at establishing appropriate conditions for transportation of Kazakh oil through Aktau-Baku route and further via pipeline Baku-Tbilisi-Ceyhan.
With this purpose, ZAO "NK "KazMunayGaz", State Oil Company of Azerbaijan Republic (SOCAR) and company groups -BTC project participants conduct negotiations on preparation of inter-governmental agreement between Kazakhstan and Azerbaijan and agreement with hosting countries, signing of which will enable to establish legal base for participation of Kazakh companies in the project both as consigners and as project investors.
Project "Pipeline "Kazakhstan-China"
Transportation of Kazakh oil via pipeline Western Kazakhstan-China to PRC markets and further to Asian-Pacific ocean region is priority export direction. Considerable positive factor connected with this direction is absence of transit countries risk. Route of pipeline Western Kazakhstan-China will pass though Kazakhstan and China territory, these countries are interested Kazakh oil export growth.
General Agreement between Energy and Natural Resources of Kazakhstan Republic and Chinese National Petroleum Corporation (CNPC) dated September 24, 1997 provides construction of export pipeline Atirau-Janajol-Aralsk-Kumkol-Borsengir-Atasu-Drujba (Alashankoy) with throughput capacity 20 mln ton annually.
At present Chinese party actively implements negotiations on signing Agreement on development of Investment of step-by-step Kazakhstan-China pipeline construction, in which it wishes to connect construction obligation fulfillment with conditions of obtaining rights for exploring and development of oilfield with reserves equaling to those of "Uzen" field.
Implementation of pipeline construction obligations depends on Chinese party decision. We consider that factors influencing adoption of pipeline construction decision are the followings:
Level of Chinese infrastructure readiness to accept, transport and process oil; Issues of transported oil pricing cost; Existence of necessary oil volumes for ensuring project loading of the pipeline.
At present we consider realization of swap operations with Russia for ensuring necessary volumes of oil transportation to Chinese market.
Development of gas transportation system
Republic of Kazakhstan is a transit country for export of Turkmen and Uzbek oil to Russian, Ukrainian and other European markets.
Transit of Central-Asian gas and supply of Kazakh natural gas to the domestic market is implemented via main gas pipeline "Middle Asia -Center" (MAC). In gas transportation sphere the main task is implementation of modernization program of main gas pipeline "Middle Asia-Center" (MAC), within the frame of which it's planned to increase continuously gas pipeline throughput capacity up to 90-100 billion cubic meters annually. We actively cooperate with our Russian colleagues. Under agreement with Russian gas companies "Gazprom", "Itera" and "Regiongaz" in 2003 total volume of Turkmen and Uzbek gas transit through Kazakhstan territory is 46 billion cubic meters.
No doubt, we intend to get economic profit from existing gas reserves, and therefore plan to increase oil production and export volume. For the full realization of its potential we consider several variants of gas export to world markets.
First of all it's Russian direction - through Russia gas can be supplied to CIS and European markets.
Besides, we study our opportunities on gas export to Turkey and Europe though TransCaspian route Kazakhstan - Turkmenistan-Azerbaijan-Georgia-Turkey.
Another direction is Asian. Gas consumption volumes in China and other Asian-Pacific ocean region grow quickly and to these markets we could supply our gas and implement transit from Uzbekistan and Turkmenistan.
What are present economic indicators of "KazMunayGaz" activities (what is the hydrocarbon production dynamics, forecasted indicators till the end of 2003)?
For the period January-August 2003 national company "KazMunayGaz" produced 5 230 thousand ton oil and gas condensate (102.9% to plan). By the last year growth was for 6.8%.
Total volume of oil transportation through main pipeline system in January was 23,465 thousand ton oil. Volume of gs transportation during the same period was 76,031 mln cubic meters gas.
On ANPZ 1,526 thousand ton oil was processed, which under the approved plan for 2003 makes 66.4%.
By he end of 2003 ZAO "NK KazMunayGaz" plans to increase oil production to 7.7 mln ton.
What are the main aspects for long-term strategy of Kazakhstan Republic oil and gas complex development?
ZAO "NK "KazMunayGaz" development strategy determines company's long-term development as an integral part of Kazakhstan oil-gas complex, necessary component of national system for management economic and social development of the country, as well as active participation of international business.
For detailed long-term plans company developed Project Strategic Plan of ZAO "NK "KazMunayGaz" for period till 2015, which determines directions and strategies set for development of National company under directions: organization development, exploration and extraction, transportation, processing and marketing of oil and oil products, development of gas sector, development of service sector and infrastructure.
What are the main indicators of Republic's oil processing complex, is its modernization planned?
According to Energy and Natural Resources Ministry of Kazakhstan Republic during 8 month of the current year oil processing volume on the local oil refineries was 5 mln. 908 thousand 600 ton, which is 21.1% higher than during the same period of 2002.
In January-August in Kazakhstan 1 mln 820 thousand ton gasoline (14% higher accordingly), 1 mln 820 thousand ton diesel oil (22.3% higher) was produced.
National company controls activity of one of three Kazakh oil refineries - Atirausk refinery (share of national company is 86.7%). Geographic location of the refinery is close to Russian major refining enterprises. Low capacity of regional market is restrictive factor for refinery development. Refinery equipment is behind of modern level and needs considerable investment for increasing capacity and effectiveness.
Since 2003 work on refinery reconstruction launched, it will enable national Company to implement production and realization of high-quality oil products and to reach higher commercial effectiveness.