According to the Ministry of energy, in 2019, oil production amounted to 90.5 million tons, an increase of 0.14 million tonnes compared to the previous year. The volume of crude oil processed amounted to 17,116 million tons, which is 0.7% (or 4.4%) more volumes in 2018. That is, the extraction in the Republic is growing faster than its processing. But it allows 100% to supply the domestic market with gasoline, diesel fuel and jet fuel.
“Oil transportation infrastructure presents the main existing export routes of Kazakhstan oil pipeline Atyrau — Samara pipeline, the Caspian Pipeline Consortium, the pipeline Atasu — Alashankou.
The main volumes of produced oil is traditionally exported to the European Union and China,”
— the document says.
Two major problems which are highlighted in the strategic plan.
- Aging. The main part of the deposits, which reflect the natural annual decline in oil production, is in the later stages of development while increasing the cost of maintaining production.
- Low prices. There is a problem of redistribution of petroleum products to neighboring countries due to low domestic prices and the lack of border posts.
One of the directions of strategy of development – the further development of oil refining. Priority is the full availability of its own market with fuels and lubricants in accordance with new environmental standards by 2025. Problems with raw materials is not expected.
“In the segment exploration and production oil sector of Kazakhstan secured significant reserves in a time horizon of 15-20 years in connection with the development projects of the “big three” — Kashagan, Tengiz and Karachaganak fields. In particular, until 2030 it is planned a number of projects that will significantly increase the volume of production — for example, the first and second phase of development of Kashagan field, the third phase of the development of the Tengiz field and other”, — stated in the plan.
Reserve or total production?
However, this does not mean that new exploration work to be conducted will not in the future even plans to create a national reserve Fund deposits. However, this is contradicted by the next paragraph of strategic development:
“Involvement in the development of resources, unprofitable in the current environment of taxation, regulation and level of technological development, through the creation of economic and fiscal incentives to deepen development, and development of applied technologies of enhanced oil recovery”, — stated in the strategic plan.
From the point of view of crude oil exports in the long run structure of the foreign trade partners of the Republic of Kazakhstan will be preserved, with the exception of a growing share of China.
The European crude oil market will stagnate. However, the decrease in demand for Kazakh oil at the moment is not expected. The main driver of changes in the dynamics of demand in the long term will be the Asia-Pacific region — particularly India and China. But this requires additional infrastructure
“At the moment the only cost-effective ability to transport oil to the East is a Kazakhstan — China pipeline capacity to 20 million tons per year. This pipeline is designed to transport oil fields in the South Turgai oil and gas region — the Zhanazhol, Kenkiyak, etc.
Accordingly, to the maximum mileage out of cooperation with China within the oil and gas sector, you need to plan the connection of Kazakhstan-China pipeline with deposits of Caspian oil and gas region”, — the document says.
Plus gasification of the whole country
Gas production in Kazakhstan grows faster than oil. In 2019 was produced 56.4 billion cubic meters of 1.02% (0.9 billion) more than in 2018. However, the part is simply disposed of.
“The associated gas produced with oil and gas complex of the Republic is 900/0 of the produced gas and requires processing at gas processing plants: Kazakh (Mangistau region), Tengiz (Atyrau region) and Zhanazholsky (Aktobe region) to the parameters of product gas (processed 55% gas).
On fields where associated gas processing is impractical, gas disposal without processing is performed by using technological needs (about 15%), injection into the reservoir with the purpose of storing and maintaining in-situ pressure (about 30%)”, — stated in the document.
Thus, the production of marketable gas in 2019 amounted to 33.1 billion cubic meters, which is 0.2 billion lower than a year earlier. But in the Ministry of energy know how in addition to receive a few billion.
“Significant additional marketable gas resource may appear through the processing part of the raw gas, as used on some small and remote gas pipelines from fields in full amount on heating oil, electricity and other types of gas flow for own needs and losses, or carrying out gas flaring.
On such fields you should consider the optimization of gas consumption for own needs and losses with the application of new technologies for processing and transportation of gas, or the construction of a national operator of centers of collection and processing of raw gas. According to preliminary estimates, the potential of this direction is estimated at 3-5 billion a year”, — stated in the strategic plan.
The main problem of the sector is the high cost of development of gas transportation infrastructure of Kazakhstan, resulting in the domestic market is not fully provided with natural gas. In 2019, the gasification level amounted to 51.5 per cent, with some regions (East and North) access to natural gas have not. Filling this gap will be the main task for the coming years.
The production is not enough infrastructure
But perhaps the most promising direction of development of the petrochemical industry. In 2019 the volume of production of petrochemical products amounted to 898 thousand tons (in 2018 — 830 thousand tons). In Republic there are 4 plant for production of road bitumen with a total maximum capacity of 1.2 million tons/year.
“The task of ensuring the internal market of petroleum road bitumen in 2019 is made, so in 2020 provided other types of petrochemical products, such as methyl tert-butyl ether (MTBE), polypropylene granular, benzene, paraxylene, etc. (production of which amounts to 400 thousand tons.)”, — the document says.
The main problem is the lack of petrochemical productions of the world level. This leads to a lack of operating experience necessary for the implementation of major projects; the problem with the staff and training. Also affected and the unfinished infrastructure of the special economic zone “national industrial petrochemical Technopark”, which prevents the attraction of investors in petrochemical projects. It is expected that the SEZ will determine the development of the sector in the country.
“For effective and rapid development of the domestic petrochemical industry requires government support in terms of maintenance of the special economic zone “national industrial petrochemical Technopark” ready infrastructure.
As can be seen from international experience, the infrastructure of chemical parks saves companies up to 20% of capital and 15% of operating costs. Providing ready infrastructure will allow the deadlines to implement major projects and attract new investments”, — stated in the strategic plan.