Kazenergy Debates Future of Energy Sector

On October 2 and 3, Astana hosted the VIIth Kazenergy Eurasian Forum, which took as its theme: “A World in Transition - Shaping a Sustainable Energy Future.”

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Focus on diversified energy sources and transportation routes

The Kazenergy Association was established in 2005 to create favorable and dynamic investment opportunities for the energy industries in Kazakhstan.  The annual Forum brings together leading scientists and experts, political and public figures, and representatives of the largest oil and gas companies to discuss the most important topics in global energy and in energy and environmental security. Kazakhstan has proven oil reserves of 30 billion barrels and daily production in 2011 of 1.64m barrels.  Since independence in 1991, oil production has risen steadily, and Kazakhstan is now the second largest oil producer after Russia among the former Soviet republics. Given the importance of the energy sector in Kazakhstan’s economy, effective sustainable development is of crucial importance; the Government is developing a national strategy on transitioning to a green economy by 2050 and a recent forum in Astana focused on this topic. In his opening address to the Kazenergy Forum, Prime Minister Akhmetov spoke about the importance of developing renewable sources of energy, pledging Government support for several promising projects in the solar and wind energy sectors.  He also confirmed that Kazakhstan will further diversify its energy projects, attracting investment not only for the production of raw materials but for deep refining as well. Meeting the projected growth in global demand for energy resources will require diversification greater choice of transport routes, as well as continued investment in the sector, the Prime Minister said.  He reiterated the Government’s commitment to improving the investment climate and working closely with the private sector. The Minister for Oil and Gas, Sauat Mynbayev, gave an update on major energy and transport projects.  Commercial production at the Kashagan oil field is expected to begin in December 2012.  The projected completion date for the expansion of the Caspian Pipeline Consortium pipeline (CPC) is 2015, which will provide capacity to increase oil exports via this route to 52 million tonnes per year.  Kazakhstan will export 29 million tonnes of crude oil through CPC in 2012. Plans are also underway to increase exports through the Kazakhstan-China Pipeline, to 20 million tonnes per annum, up from 11 million tonnes in 2012. Minister Mynbayev confirmed that an international consortium will invest USD 1.7 billion in developing a deep refining facility at the Atyrau refinery, which will triple the production of high-octane gasoline. Kazakhstan has proven gas reserves of 9.3 trillion cubic meters, which amounts to 1.9% of global supplies.  While the domestic market remains the priority, Kazakhstan also exports gas to China and Russia.  Minister Mynbayev gave details of the plan to increase to 65 billion cubic meters per annum the capacity of the Kazakhstan-China pipeline, through which 34 billion cubic meters will be exported in 2012. Chairman of the Kazenergy Association, Timur Kulibayev, said that extraction of oil at the major Kashagan field is expected to begin in March 2013.  He also highlighted the potential for local producers to supply competitive goods and services to the energy sector, both in Kazakhstan and other markets. Lyazzat Kiinov, the chairman of Kazakhstan’s national oil and gas company KazMunaiGas (KMG), gave an optimistic forecast for the development of the sector over the next ten years.  KMG is involved in a number of exploration projects both with partners in the Caspian Sea and independently onshore.  The volume of oil and gas produced by Caspian fields is expected to increase by 1.6 times between now and 2022, Mr Kiinov said.  This will help KMG achieve its goal of becoming one of the 30 largest oil producers in the world. The modernization of three major oil refineries located in the west (Atyrau), north (Pavlodar), and south (Shymkent) will take place over 2013-2015, with a required investment of USD 6 billion, Mr Kiinov said. The Forum’s final day focused on the global energy and environment strategy and Kazakhstan’s “Green Bridge” initiative, which encourages businesses to adopt green policies and technologies, and close the technological gap between developing and developed countries.

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