Eric Watkins
Senior Correspondent
LOS ANGELES, July 14 -- Kazakhstan has requested that Chevron-led Tengizchevroil find a way to store its open-air sulfur stocks indoors by 2010.
"By 2010, all the sulfur must be stored in a storage facility if it's not sold by then," said Raushan Sarmurzina, a senior official of the Kazakh ministry of energy and minerals.
A Tengizchevroil spokesman questioned the validity of the Kazakh ministry demand, saying the company is not violating environmental law by storing sulfur in the open air.
"First of all, we think that at the moment we are storing the sulfur in a proper way," said Tengizchevroil official Murat Mynbayev. "As for 2010, we have no information about that."
Mynbayev said the company was still "working on various ways of storing sulfur indoors, and [it] planned to cut stocks significantly by 2017."
The oil from Tengiz contains hydrogen sulfide, which is processed into huge piles of inert yellow sulfur and stored near the oil wells before the crude oil is transported by pipeline.
Kazakh authorities long have accused the Tengiz oil project of making slow progress in removing open-air sulfur stocks. Last year, a court imposed a 74 billion tenge fine on Tengizchevroil but later reduced it by 50% (OGJ, Oct. 12, 2007, p. 30).
Export tax considered
The new announcement coincided with reports that the Kazakh government, reversing an earlier decision, could try to impose export duties on oil produced by the Tengizchevroil consortium.
Kazakh Deputy Finance Minister Daulet Yergozhin, who noted that the Karachaganak operating company had started to pay the newly introduced export duty, said the government is now considering whether Tengizchevroil also has to pay the duty.
Tengizchevroil currently produces some 300,000 b/d of crude oil, which accounts for 20% of Kazakhstan's total oil production, but it has announced expansion plans.
The total capacity of the consortium will increase to a total of 400,000 b/d following the first phase expansion of 90,000 b/d, while the start-up of full facilities in this year's second half will further increase production capacity to 540,000 b/d (OGJ Feb. 4, 2008, Newsletter).
The Tengizchevroil partners include Chevron 50%, KazMunaiGas 20%, ExxonMobil Kazakhstan Ventures Inc. 25%, and LUKArco 5%.
Contact Eric Watkins at [email protected]
