Tengizchevroil raises production, seeks outlets

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 25 -- Chevron Corp said its Tengizchevroil LLP affiliate has completed a major expansion at Tengiz field in Kazakhstan that will nearly double the site's initial production capacity.

Chevron said completion of the expansion program raises Tengizchevroil's crude oil production capacity to 540,000 b/d, up 35% over the 400,000 b/d achieved earlier this year in the firm's first expansion phase. Originally, the site produced 310,000 b/d.

The California-based firm said its sour gas injection (SGI) operations and the crude processing portion of the second generation plant (SGP) have been successfully in service for several months while the natural gas and sulfur processing portions of SGP were being completed and commissioned.

"SGP's full facilities now stabilize and sweeten crude oil, as well as separate and process natural gas into gas products and elemental sulfur," it said. "SGI reinjects one third of produced sour gas into the reservoir at very high pressures to help preserve reservoir pressure."

Chevron has not formally announced how it will transport the additional output from Tengiz field.

Chevron holds a 15% stake in the Caspian Pipeline Consortium, with Tengischevroil entitled to use 450,000 b/d of the pipeline's 695,000 b/d design capacity. But Russia is still blocking the line's expansion.

As a possible alternative, Tengizchevroil is reported to have made an agreement to ship up to 2 million tonnes/year of oil—possibly rising to 5 million tonnes/year— by barge across the Caspian Sea to Azerbaijan and onward by rail across Georgia to export terminals on the Black Sea.

Chevron has a 50% stake in Tengizchevroil, while state-run KazMunaiGas owns 20%, ExxonMobil Kazahkstan Ventures Inc. 25%, and LukArco 5%.

Contact Eric Watkins at hippalus@yahoo.com.

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