Thursday, February 24, 2011

CNPC and KazMunaiGaz boost strategic partnership. Urikhtau field to provide additional gas supply for Kazakhstan-China pipeline.

CNPC and KazMunaiGaz have signed co-operation agreement to jointly develop the Urikhtau natural gas field located near Kenkiyak in the Aktyubinsk region of western Kazakhstan. CNPC and KazMunaiGaz will hold 50:50 interest in a joint venture to explore and develop the Urikhtau gas field which was tapped during the Soviet era, but has not been developed since Kazakh independence. According to earlier estimates by KazMunaiGaz, Urikhtau's reserves are estimated at ~40 billion cubic meters (1,413 Bcf), and the field has an estimated potential to produce 1.5-2 Bcm/year (52-71 Bcf/year).
The field's gas output is expected to be one of the sources for Kazakhstan's Beineu-Shymkent pipeline, which is a 1,500 km pipeline linking several existing trunk lines in Central Asia, including the Center, Bukhara-Ural, BGR-TBA and Kazakhstan-China pipelines. Construction of the pipeline started in late December and is expected to be completed by 2012.

The 10 Bcm/year pipeline is the second phase of the Kazakhstan-China gas pipeline and will go from near the Caspian Sea to a linkup with the first phase of the pipeline in south-central Kazakhstan. The first phase, which brings gas from Turkmenistan to China via Kazakhstan, was launched in December 2010 with a capacity of 30 Bcm/year and may be increased to 40 Bcm/year.
With the completion of the pipeline construction and development of the Urikhtau gas field, additional gas volumes will be available to export along the Kazakhstan-China gas pipeline. Also, China is seeking greater access to natural resources in Central Asia to fuel its fast-growing economy. This Kazakh co-operation will help China meet the growing demand to an extent.

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