TENGIZ FIELD OPERATION MARKS SECOND ANNIVERSARY

Chevron Corp. and Kazakhstan have celebrated the second anniversary of operations by Tengizchevroil (TCO), their joint venture development project to produce and sell oil from giant Tengiz field. The project, billed as the largest of its kind in the former Soviet Union, aims to produce and export for hard currency a total of about 6-9 billion bbl of oil from Tengiz field near the Caspian Sea coast in Northwest Kazakhstan. The first phase of the $20 billion, 40 year project is complete. It has

April 17, 1995

4 min read

Chevron Corp. and Kazakhstan have celebrated the second anniversary of operations by Tengizchevroil (TCO), their joint venture development project to produce and sell oil from giant Tengiz field.

The project, billed as the largest of its kind in the former Soviet Union, aims to produce and export for hard currency a total of about 6-9 billion bbl of oil from Tengiz field near the Caspian Sea coast in Northwest Kazakhstan.

The first phase of the $20 billion, 40 year project is complete. It has a processing capacity of 85,000 b/d and the ability on short notice to expand to 130,000 b/d.

To mark the anniversary, Tengizchevroil formally began operation Apr. 6 of its new $102 million demercaptanization plant to remove sulfur compounds from Tengiz crude prior to pipeline shipment.

Completion of the plant, a major part of the development project, allows TCO to provide low mercaptan crude required for shipment through the Russian pipeline system.

Morley J. Dupre, TCO general director, said, "We anticipate that with this accomplishment, TCO exports will soon increase."

The plant uses the Kazan process, developed by the Russian Institute for Raw Hydrocarbons, to remove light mercaptans from crude oil.

Construction began in March 1994, and the plant was mechanically complete last January. Brown & Root, Bechtel ENKA, Vegyepazer, and Tengizneftestroi provided construction personnel.

As an interim measure, chemicals were added to the crude to lower mercaptan content before the plant was complete.

OTHER HIGHLIGHTS

Dupre outlined other highlights of the joint venture's accomplishments during its first 2 years:

Environment - Completed environmental baseline, air quality, and groundwater quality studies, established a sanitary landfill and recovery center for recycling, and reduced water discharge by improving water effluent plant operations.
Safety - Trained all supervisors and emergency response groups, implemented a preventive maintenance program on 59 wells, purchased new fire fighting trucks and emergency response vehicles.
Employees - Upgraded medical care and general standard of living, provided technical, operational, and safety training to more than 2,500 employees, implemented educational assistance and scholarship programs.
Community - Donated time, medical equipment, and pharmaceutical supplies to local clinics and laboratory equipment and building supplies to local schools and institutes, provided vehicles to police agencies, assisted in local road and bridge repairs.
Local business development - Used local companies and institutes to perform technical laboratory analysis and research, provided training to employees of local companies, utilized 49 local businesses in 1994, up from 33 in 1993.
Technology - Installed central computer capability for financial and operational software and 800 personal computers on a fiber optic computer network linking TCO with world networks, brought in state of the art technology to upgrade oil field operations.
Oil exports - Reduced light mercaptans in crude oil to less than 5 ppm from 350 ppm, set up a joint task force with Kazakhstan to study transportation alternatives, sold all crude oil TCO was permitted to export, established pipeline contracts with 10 pipeline/terminal companies.

In addition, social projects were completed in the Atyrau oblast.

This 5 year, $50 million program, managed by TCO with the involvement of oblast officials, has spent more than $21 million to date to upgrade medical, heating, drinking water, and housing facilities. Work is under way on further upgrades to water treatment and distribution systems and medical facilities and services.

"We are proud of what we have been able to achieve in our first 2 years in Tengiz," Dupre said. "TCO will be able to accomplish much more once export issues are resolved."

Chevron said although the joint venture still lacks an adequate export pipeline, TCO is confident the problem will be solved.

A project that may provide more export capacity is taking shape in plans of Caspian Pipeline Consortium Ltd. It proposes an ultimate 930 mile, $1.2 billion crude oil system from Tengiz field to an export terminal on the Black Sea coast (see map, OGJ, Jan. 30, p. 38).