By OGJ editors
HOUSTON, July 15 -- BG Group PLC, on behalf of its partners in giant Karachaganak oil and gas condensate field in northwest Kazakhstan—ENI SPA, ChevronTexaco Corp. and OAO Lukoil—has reported that first oil has been produced from the field for export through the Caspian Pipeline Consortium (CPC) pipeline to world markets via the Black Sea. Gas injection into the field also has begun.
First sales of oil exported through CPC are expected by the end of the third quarter, at which time the oil will be available at the Black Sea port of Novorossiysk.
The start of export production marks the delivery of a major objective under Phase II of the Karachaganak field development program, which BG said resulted from close cooperation among the consortium participants, the Republic of Kazakhstan, and its national oil and gas company KazMunaiGas.
Phase II involves the $1billion enhancement of existing facilities, including environmental rehabilitation outstanding from the Soviet era and the construction of new facilities, including new gas and liquids processing and gas injection facilities, workover of more than 100 wells, construction of a 120 Mw power station, and construction of a 635 km pipeline to connect the field to the CPC pipeline at Atyrau.
Prior to completion of the new facilities, all gas and condensate production was sent to the Orenburg facility in Russia for processing. Output from the field now is planned to increase to more than 10 million tonnes/year of liquids—200,000 b/d of oil—to CPC and Orenburg, and as much as 7 billion cu m/year of sales gas (700 MMscfd) to Orenburg. About 70% of the field's condensate is to be exported via CPC.
BG and ENI are joint operators of Karachaganak, each holding 32.5% interest. Other partners are ChevronTexaco 20% and Lukoil 15%. KazMunaiGaz, the Republic of Kazakhstan's designated authority, jointly manages the project.
Speaking Tuesday, BG Chief Executive Frank Chapman said: "This is one of the most significant achievements in the global hydrocarbons industry, and is a tribute to all those who have worked in challenging conditions on the massive Phase II construction program."
Further phases are expected to follow to increase liquids production, subject to the development of a market for the substantial additional gas volumes that will be produced. The consortium's license period ends in 2037.
The Karachaganak field, discovered in 1979, is one of the world's largest oil and gas-condensate fields. It covers 280 sq km and holds potential recoverable reserves of 5 billion boe over the 40 year license period.