BG to sell Karachaganak gas to KazRosGaz

KazRosGaz, a joint venture of OAO Gazprom and KazMunaiGaz, will buy 16 billion cu m/year of gas from BG Group PLC and its partners in the third phase of the Karachaganak project in northwest Kazakhstan.

June 14, 2007

2 min read

Uchenna Izundu
International Editor

LONDON, June 14 -- KazRosGaz, a joint venture of OAO Gazprom and KazMunaiGaz, will buy 16 billion cu m/year of gas from BG Group PLC and its partners in the third phase of the Karachaganak project in northwest Kazakhstan. KazRosGaz will also purchase increased volumes of condensate, but figures for this were not available.

The contract lasts for 15 years. Gas is expected to come on stream in 2012 following completion of the $8 billion expansion at Karachaganak.

Production is expected to double at Karachaganak once the third phase is sanctioned in 2008 to 16 billion cu m/year of gas and 16.5 million tonnes/year of condensate. The Orenburg processing plant in Russia currently handles 8 billion cu m/year of untreated Karachaganak gas.

Mark Carne, BG executive vice-president, Europe and Central Asia, said the gas sales agreement covers more than 7 tcf of gas. "Additional gas sales resulting from the expansion will also enable the venture to increase liquids production for export to high-value western markets," he added.

BG is the joint operator of Karachaganak gas and condensate field with a 32.5% interest. Karachaganak holds estimated gross reserves of more than 2.4 billion bbl of condensate and 48 tcf of gas. Partners are Eni SPA (joint operator) with a 32.5% stake, Chevron Corp. with 20% interest, and OAO Lukoil with 15%.

Contact Uchenna Izundu at [email protected].