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Kazakhstan’s Kashagan oil field seen reaching 500,000 b/d from 335,000 b/d now: Eni

Oil production from Kazakhstan’s giant Kashagan field could reach as much as 500,000 b/d just with the use of existing onshore processing facilities and some additional drilling, from current output of 335,000 b/d, while a second development phase is also being considered, Luca Vignati, Central Asia executive vice president for Italy’s Eni, said.

• Existing phase 1 plant could handle 500,000 b/d
• Growing interest in further phases
• Kazakh crude eventually to be shipped via BTC
• Karachaganak focus is stability after record year

Speaking to S&P Global Platts on the sidelines of a conference in Baku, Vignati noted that the nameplate capacity of the onshore processing facilities at Kashagan is 450,000 b/d, but said this could be lifted to a “ceiling” of 500,000 b/d through a process of debottlenecking, along with work offshore to add drilling and gas injection capacity.

Eni said Kashagan, which began commercial production in 2016 after an abortive startup in 2013 and more than $50 billion of spending, is now producing 335,000 b/d of oil. It holds estimated recoverable oil reserves of 9 billion-13 billion barrels. Eni was heavily involved in the development, and a target of criticism along the way.

Vignati said there was growing discussion among shareholders and with the government of a phase 2 development, with national authorities “pushing a lot in terms of knowing what we will do with that second phase.”

A second-phase development would require not only new processing facilities, but additions to the extensive artificial islands already built in the shallow, ice-prone waters of the Caspian Sea during phase one, Vignati said.

However there have been rapid improvements in what was an insufficient geological understanding of the western part of the field – the likely target of phase two – and its connectivity to the eastern area that is currently producing, Vignati said.

“Up to now we have been interested only in the eastern part of the field, what was considered the easiest part,” he said. However, “it’s a real digital field Kashagan – we are getting so much information on an hourly basis. It’s a dynamic geological understanding.”

While the second phase will not be built to the designs originally envisaged, “there will be for sure additional phases” and the challenge is to achieve “alignment” between the parties concerned, he said.

AZERI EXPORT OPTION

Vignati said Eni does not consider the mainstay CPC pipeline through Russia to be all that is needed for Kazakh oil exports and that along with using a link to Russia’s Transneft system at Samara, there would be a need to use spare capacity in Azerbaijan’s BTC pipeline to ship Kazakh crude.

Eni holds a 5% stake in BTC, which operates at less than two thirds of its 1.2 million b/d capacity. The pipeline has its terminus on Turkey’s Mediterranean coast, cutting out the need to ship through the Bosporus, but so far only small volumes of Kazakh crude have been added to the main Azeri crude stream.

When it comes to the expansion already undertaken on CPC and the scope for additional expansion, “there is a limit in terms of the pressure,” Vignati said.

“Very deep” discussions are underway between Azerbaijan and Kazakhstan’s governments on making use of BTC for Kazakh crude beyond present levels, he said. “Don’t ask me when, but it will happen someday for sure.”

KARACHAGANAK STABILIZATION

On Kazakhstan’s Karachaganak gas and condensate field, which holds an estimated 13 billion barrels of “in-place” liquids, Vignati said the main goal was to maintain stable production, which entails re-injecting vast volumes of gas back into the field to maintain pressure levels.

Karachaganak produced a record 230,000 b/d of liquids last year, while 9 Bcm of gas was reinjected. Vignati said gas re-injection could be increased to 11 Bcm-12 Bcm/year. “The main target is to keep the plateau extension as long as we can,” he said.

Eni holds a 16.81% stake in the North Caspian Operating Company that manages Kashagan and a 29.25% stake in Karachaganak.
Source: Platts

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