BG, Eni’s Kazakh Venture Cuts Gas Condensate Supply to Gazprom

A Kazakh venture led by BG Group Plc (BG/) and Eni SpA (ENI) cut unstable gas condensate supplies to a Russian plant run by OAO Gazprom after opening its own processing facilities, Oil Minister Sauat Mynbayev said.

“The reason is the start of the new processing complex at KPO, not any disagreements,” Mynbayev told reporters today in Astana, the Kazakh capital, referring to the Karachaganak Petroleum Operating BV venture, which is developing Kazakhstan’s second-largest producing field.

Negotiations between Gazprom and KPO are in progress, Mynbayev said, declining to comment on when a supply agreement for Gazprom’s Orenburg plant may be reached. Karachaganak “will need additional facilities, so some gas condensate may be supplied to the Russian plant.”

The Orenburg plant, which handles 8 billion cubic meters of gas a year from Karachaganak, may have to shut for lack of a key feedstock that it gets from unstable gas condensate, Reuters reported earlier today, citing unidentified people in the industry.

BG Group and Eni each hold 32.5 percent of the Karachaganak venture, Chevron Corp. has 20 percent and OAO Lukoil 15 percent. The Kazakh government agreed with the partners this month for state-owned KazMunaiGaz National Co. to acquire 10 percent in Karachaganak.

To contact the reporter on this story: Svetlana Antoncheva in Belgrade at santoncheva1@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net

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