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KazMunaiGas to build $1.5 bln gas processing plant

Kazakhstan's state energy company KazMunaiGas plans to build a $1.2-1.5 billion natural gas processing plant at Karachaganak, one of Kazakhstan's biggest onshore oilfields, it said yesterday.

The company's head Uzakbai Karabalin said a government meeting that KazMunaiGas would start construction of the plant in late 2008 or early 2009. „We, KazMunaiGas, plan to build it ourselves, possibly with the help of private investments,” Karabalin said, adding that a feasibility study on the plant with annual capacity of 5-7 billion cubic meters will be ready next month. Energy Minister Baktykozha Izmukhambetov said the plant would not affect shipments to Orenburg, a venture Russia is finalizing with Kazakhstan to process Karachaganak gas.

Karachaganak is co-led by Italy's ENI and Britain's BG, which both hold 32.5% stakes, while US Chevron owns 20% and Russia's Lukoil has a 15% interest. Karachaganak's gas production rose to 11.9 billion cubic metres in 2006 from 11.5 billion a year earlier, Lukoil has said. Gazprom is keen to contract incremental supplies of gas from fields like Karachaganak to cover Russia's domestic needs. But Izmukhambetov said the new Kazakh plan would not hamper shipments to Russia. (gulf-daily-news.com)