Kashagan to start commercial production in 2014 - Kulibaev

energy

Kashagan to start commercial production in 2014 - Kulibaev

By SRI ⋅ September 5, 2008 ⋅

Kazakhstan’s giant Kashagan field in the Caspian Sea is unlikely to start commercial production until 2014, Timur Kulibaev, President Nazarbayev’s son-in-law and president of Kazakhstan’s oil association KazEnergy said on Thursday.

According to Kulibaev, severe winter weather conditions would not make the launch of production in October 2013 possible.

“We are talking about October 2013, though in fact the production facilities cannot be started up in winter time. That’s why they won’t make it before 2014,” he told a press conference in Astana.

A memorandum between the consortium of oil companies developing the project and the Kazakh government signed earlier this year stipulated the production starting date at October 2013.

Kulibaev said that the facilities would be ready by that date, yet actual production could not start until the weather permits it. Therefore, the delay would be technical and would not mean a breach of the contract. Once launched, first Kashagan output would come in 2014 at 450,000 barrels a day.

“We expect that as much as 450,000 barrels a day will be produced at Kashagan in 2014. By that time all onshore and offshore facilities must be ready and all transportation related issues solved,” he said.

The Kazakh government and the new CEO of the national oil company, Kairgeldy Kabyldin, insisted that the project will start operating according to schedule.

Sauat Mynbayev, Kazakhstan’s energy minister, said: “Everything is on schedule” for production to begin in 2013,” Financial Times quoted the minister. Mynbayev said that Kulibayev was “not responsible” for the Kashagan project.

Kashagan production is expected to peak at 1.5 million barrels a day. The project has been plagued by delays, cost overruns and technical difficulties developing the project. Production, initially set for 2005, was later pushed back to 2008, 2010-11 and finally to 2013, due to rising costs and difficulties of the project. The consortium is expected to finalize its revised deal with the Kazakh government in October this year.