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Kazakhstan Kashagan oil field producing at reduced rates

November 28/2019

MOSCOW (MRC) -- Kazakhstan's Kashagan oil field, one of the mainstays of the CPC Blend crude grade, is producing at a reduced rate due to an issue with gas compressors, the operator, reported S&P Global with reference to North Caspian Operating Company's statement Tuesday, adding that such a reduction was "not unusual."

The disruption appears to put in doubt expectations of record-high loadings of CPC crude at Novorossiisk in November and December - schedules had suggested loadings would reach 1.5 million b/d in both months.

In a statement, NCOC said it "continues to produce safely at a reduced rate. We are safely working on correcting a technical issue with the gas compressors. It is not unusual for daily production to be reduced for various reasons, including maintenance and this is factored into production planning."

"Our company is focused on safely returning the unit to normal operation as soon as possible," it added.

Gas compressors play a vital role at Kazakhstan's largest oil fields due to the large amounts of gas produced in the course of oil production, much of which is reinjected to maintain pressure levels.

The Kashagan field came on stream in 2016 after long delays and cost over-runs. Production levels have generally been increasing and it is now the second largest contributor to CPC Blend after the Tengiz field.

Kashagan crude oil production hit a record-high 400,000 b/d on September 4 and overall liquids production from the field averaged 422,000 b/d in the third quarter, NCOC has said. The operator has been focused on improving the reliability of the facilities, according to company executives.

The crude is sent across southern Russia via a dedicated pipeline to Novorossiisk, on the Black Sea coast.

NCOC is a seven-company consortium comprising China's CNPC, Italy's Eni, ExxonMobil, Japan's Inpex, state-owned KazMunaiGaz, Shell and Total.

As MRC wrote previously, in January 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene (PE) plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

Ethylene is a feedstock for producing PE.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased.
Author:Margaret Volkova
Tags:PE, crude and gaz condensate, ethylene, petrochemistry, CNPC, Eni, Exxon Mobil, Shell, Total Petrochemicals, KazmunayGaz, Kazakhstan, Russia, South Korea.
Category:General News
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