The gasification of Astana and of the central and northern regions of Kazakhstan has to be implemented during the following year and a half, the Kazakh President Nursultan Nazarbayev said on March 5, speaking at the joint session of the Parliament chambers. Mr. Nazarbayev noted that the current level of centralized gas supply in the Kazakh territory stands at around 50%, covering nine regions in the country’s west and south. This leaves central and eastern parts of Kazakhstan without access to natural gas, even though domestic output has risen from 8 to 52BCM/a since independence, a figure projected to grow further in the coming years. Mr. Nazarbayev underlined that the increasing number of vehicles, as well as the fact that both of the city’s thermal power plants are coal-fueled, have resulted in smog scourging Astana. Indeed, in December 2017, pollutants in Astana’s air exceeded permissible levels bringing about the appearance of a heavy shroud of smog that enveloped Kazakhstan’s capital. Getting Astana connected to a gas supply is going to help reduce harmful emissions by six times, or 35 thousand tons on an annual basis, Mr. Nazarbayev stated.
In order for Astana and the central and northern Kazakhstan to acquire much-needed gas infrastructure, the Kazakh President pointed to the importance of the soonest possible implementation of the Saryarka gas pipeline by Kazakhstan’s state pipeline monopoly KazTransGas. Realization of the pipeline will be divided into four distinct phases. Firstly, a 1.081km-long pipeline will be built from Karaozek, Kyzylorda region, to Astana, through the cities of Zhezkazgan and Karaganda. At a later stage, two additional pipeline extensions will run from Astana to Kokshetau and from Kokshetau to Petropavlovsk. Finally, the construction of two compressor stations in Zhezkazgan and Temirtau will boost aggregate pipeline capacity to 3BCM/a.
According to the technical feasibility study finalized by KazTransGas in May 2017, the overall cost of all four phases will amount to KZT370bn (USD1.2bn). Realization of the 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. The Saryarka pipeline will form part of the Beineu-Bozoi-Shymkent main gas pipeline, a joint project of China and Kazakhstan with an approximate length of 1475km, aiming to ensure a stable supply of natural gas to the southern part of the country and to improve Kazakhstan’s gas export prospects to China. Presently, the Kazakh Energy Ministry considers an increase in the Beineu-Shymkent pipeline’s throughput capacity to 15BCM/a from today’s 10BCM/a.
However, the ambitious deadline set out by President Nazarbayev with regard to Astana’s gasification plan will only be met provided that the requisite financing will be secured. Kazakh Energy Minister Kanat Bozumbayev has already been engaged in talks with representatives of the European Bank for Reconstruction and Development (EBRD) in search of funds in the form of a loan since the state budget alone will not be able to accommodate such a large-scale venture. In case of a long-term loan approval, the price levels for natural gas supplies to end customers, in comparison with those of fuel oil, diesel fuel, and coal, will determine the payback period of the project.
If tariffs prove too high for households and businesses, Minister Bozumbayev has put forward the alternative of liquefied natural gas (LNG), currently shipped from Russia to Kazakhstan by motor transport under a 2016 contract between Gazprom Export and Global Gas Regasification. Around 2,600 tons of Russian LNG was delivered to the abovementioned poorly gasified areas of Kazakhstan in 2017, as specified by Gazprom. From 2014 to 2017, LNG consumption in Kazakhstan is believed to have grown by 65%. Both options (piped gas via Saryarka and LNG) remain high on Kazakhstan’s gasification agenda since natural gas is more affordable than gasoline and has a limited environmental impact. Lastly, according to the US Energy Information Administration (EIA), coal basins lying in the north and center of Kazakhstan could also serve as a source of natural gas supplies for areas of the country that are far from natural gas production and infrastructure.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-march-7-2018/#2
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