Kazakh gas exports grow by 15% y/y to 12.7bn cubic metres in 2015

By bne IntelliNews March 24, 2016

Kazakhstan increased natural gas exports by 15% y/y to 12.7bn cubic metres (bcm) in 2015, the director of the department of gas industry development in the Ministry of Energy, Galym Nurgaziyev, said on March 18. Kazakhstan’s gas extraction grew by 5% y/y to 45.3 bcm in 2015.

Kazakhstan is continuing to expand its gas exports and extraction despite an economic slowdown and low oil prices which negatively impact oil-indexed gas contracts. The significant growth of gas exports is likely a result of Kazakh efforts to offset low profits from domestic gas sales. This is due to the fact that domestic gas prices are regulated in Kazakhstan. However, a detailed data on domestic gas consumption were not provided. In previous years it hovered around 20 bcm per year. This large difference between gas extraction volumes on the one hand and gas sales and exports on the other is a result of the fact that Kazakhstan's largest oil fields contain substantial volumes of natural gas, most of which is reinjected into oil wells to improve recovery rates.

Meanwhile, spokemsan for the country’s natural gas operator KazTransGas Ibulla Serdiyev said on March 18 that the company incurred KZT124bn (€318mn) losses from gas sales on the domestic market in 2015 due to lower wholesale prices than gas production costs. KazTransGas compensated these losses with higher income from transportation and exports. Serdiyev also informed about company’s infrastructure development in 2015. The main achievement was the commissioning of the pipeline Beyneu-Bozoy-Shymkent which will be part of the third line of to export gas from Kazakhstan to China in December 2015. As a result, the main project was concluded, allowing to ship 55 bcm of Central Asian gas a year to China The project is part of the gas pipeline from Turkmenistan via Uzbekistan and Kazakhstan to China. Serdiyev also noted progress in the government’s gasification programme. KazTransGas is currently providing gas to 7mn houseolds and over 30,000 enterprises in 10 regions of Kazakhstan. The company plans to construct and modernise over 7,000 km of gas pipelines by 2020.

KazTransGas is a national operator in the sphere of gas in Kazakhstan. It consists of mining, transportation and trade branches. It is owned by state-owned KazMunayGas national company.

Kazakhstan has the third largest gas reserves in the Commonwealth of Independent States after Russia and Turkmenistan. Geological gas reserves are estimated at 6.7tn cubic metres including new fields discovered on the Caspian shelf. Recoverable gas reserves are estimated at 3.7tn cubic metres.

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