Karachaganak deliveries furthered delayed to second quarter 2004

By OGJ editors

HOUSTON, Dec. 9 -- BG Group reported Friday that production of oil from Karachaganak field in northwest Kazakhstan into the Caspian Pipeline Consortium export pipeline—along with sales at Novorossiysk—are not expected to resume until second quarter 2004.

Although the caustic soda contamination reported this fall (OGJ Online, Sept. 25, 2003), has been successfully resolved, BG said, continued testing during commissioning has identified an unrelated issue associated with small-bore pipe welds and low-pressure instrumentation.

This must be remediated for safety reasons, and winter conditions will extend considerably the time required," BG said. In the winter temperatures in the region can fall as low as minus 40° C.

The delay will have no impact on BG's 2003 or 2006 production targets, the company said.

BG's total production from Karachaganak in 2004 is now projected to be about 35 million boe—4 million boe less than planned but 12 million boe more than expected production in 2003.

"Production to Orenburg, now running at record levels, is not affected, " BG said. Production of 120,000 b/d of oil and condensate and 700 MMscfd of sales gas is expected to be maintained throughout the winter period and beyond, a company spokesperson said.

BG operates the field on behalf of partners ENI SPA, ChevronTexaco Corp. and OAO Lukoil.

First gas was reinjected into the Karachaganak reservoir July 2, and first production from the new facilities entered the connecting pipeline to Atyrau on July 15, BG said. However, facilities were shut down in September because of the caustic soda contamination.

When the new facilities are commissioned, the field will have a production capacity of 10 million tonnes/year of liquids (200,000 b/d of oil) and as much as 7 bcm/year of sales gas (700 MMscfd). Further development will follow to increase liquids production, subject to the development of a market for the substantial additional gas volumes to be produced.

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