Around 2.5BCM of natural gas are going to be required in order for a project on the gasification of Astana and of Kazakhstan’s central and northern regions to be implemented, the country’s Vice-Minister of Energy Magzum Mirzagaliyev said last week. According to Mr. Mirzagaliyev these volumes represent about half of the gas needs of Kazakhstan’s southern parts, currently standing at about 5BCM. The Vice-Minister also stressed out that the response to the domestic gas demand remains an area of priority as far as Kazakhstan’s natural gas balance is concerned, although he didn’t rule out the possibility of further future exports. Kazakhstan used to export 13.7BCM of gas abroad. This amount has been increased by over one third following a year-long, $1bn-worth agreement between KazTransGas and PetroChina on the shipment of 5BCM via the colossal Central Asia-China gas pipeline, inked in October 2017. KazTransGas, the operator of the Kazakh gas pipeline system, hasn’t named the suppliers of this gas, but has revealed that some of it will come from reserves in its underground storage facilities. However, this statement by Mr. Mirzagaliyev raises once again the question of Kazakhstan’s actual ability to participate in the Southern Gas Corridor (SGC), via the connection of the Trans Caspian Gas Pipeline (TCGP) to Tengiz field. Owing to the country’s limited gas surplus, the state-owned oil and gas firm KazMunaiGas and Gazprom have extended until 2038 the long-term Karachaganak sales and purchase contract, providing for the delivery of some 10BCM/a of gas to Russia’s Orenburg gas processing plant and for steady supplies to the Kazakh market, including through swaps.
A few days earlier, Energy Minister Kanat Bozumbayev specified that the price of natural gas intended for Kazakhstan’s ill-supplied capital and central and northern areas (taking into account average market price plus transit tariffs) is going to range from 47 to 50KZT($0.15-0.16)/CM, an amount certainly low if compared to EU prices but relatively more expensive than prices in the eastern Aktubinskaya oblast and, in any case, a lot more expensive than the widely used coal. Nevertheless, the 3 million residents of the particular geographical territory are highly encouraged by the authorities to switch from coal to natural gas, as the rising number of vehicles in Astana and the coal-fueled power plants have intensified the problem of smog and bad air quality.
Kazakhstan’s President Nursultan Nazarbayev has set a rather ambitious deadline of 1.5 year for the Astana gasification project to take effect, i.e. for the materialization of the $1.2bn Saryarka gas pipeline, an extension of the Beineu-Bozoi-Shymkent main gas pipeline from Kyzylorda region to Astana and from there on to Kakshetau and Petropavlovsk, into four distinct phases. At the moment, the level of centralized gas supply in Kazakhstan is 50%, covering nine western and southern regions. Kazakhstan’s domestic gas output has reached 52BCM/a, from only 8BCM/a produced right after the country’s independence. In 2017, 2,600 tons of Russian LNG were delivered to Astana and the poorly gasified Center and North of Kazakhstan, under a 2016 contract between Gazprom Export and Global Gas Regasification for LNG shipments from Russia to Kazakhstan by motor transport. Realization of the Astana gasification project will allow for the switching of 192 private boiler houses, 48 small communal boiler houses, 22,000 private residential houses and Astana’s CHPP-1 and CHPP-3 (hot-water boilers implemented in already existing infrastructure of Central Heat and Power Plants, CHPP) to natural gas, positively affecting the ecological condition in the capital. On the other hand, inadequacy of financial resources could push back the project’s deadline, even though talks to attract support from the European Bank for Reconstruction and Development (EBRD) are underway.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-march-28-2018/#4
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