Gas Refinery Planned for BG, Eni-Led Field by Kazakh Government

Kazakhstan plans to build a gas refinery by 2019 at the Karachaganak oil project, a joint venture led by BG Group Plc (BG/) and Eni SpA. (ENI)

Construction is expected to begin in 2014 after agreement with the venture partners is reached, state-owned KazMunaiGaz National Co. (KMGZ) said by e-mail today. Building work mustn’t prevent KazMunaiGaz meeting a commitment to supply Russia’s Orenburg refinery with as much as 16 billion cubic meters of gas a year following expansion of Karachaganak, the company said.

In December, KazMunaiGaz agreed to buy 10 percent of Karachaganak, at the time the only major oil project without state involvement. In an address to the nation in January Kazakh President Nursultan Nazarbayev ordered completion of designs, and work to begin on the 5 billion-cubic-meter a year refinery.

The first phase is expected to begin operating in 2019, and the second phase may start up in 2023, KazMunaiGaz said.

Karachaganak has an estimated 9 billion barrels of condensate and 48 trillion cubic feet (1.4 trillion cubic meters) of gas initially in place, BG Group Executive Vice President Ashley Almanza said in December. As of June 30, BG and Eni will each hold 29.25 percent of the venture, Chevron Corp. (CVX) 18 percent and Russia’s OAO Lukoil will have 13.5 percent.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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