Platts 2005/11/23

Kazakhstan to sign petrochemical complex deal by Dec 15

The Kazakhstan's government plans to sign the first agreement with foreign companies to build petrochemical complexes by Dec 15 as the country aims at becoming a serious player on the world market, Kazakhstan's prime minister Danial Akhmetov said Wednesday, as reported by national Kazinform news agency.
The government plans to sign an agreement which is to allow the country to develop [petrochemical] sector, Akhmetov said on the sidelines of a petrochemical conference in Kazakhstan's capital of Astana.
Kazakhstan plans to build two large petrochemical complexes at the Tengiz and Kashagan fields to produce up to 2-mil mt of petrochemicals. Investments in the projects are estimated at around $7- to $8-bil. Of the total, the country plans to invest some $500-mil "in the near future."
"The most perspective sector of petrochemicals for Kazakhstan is gas processing. It is this sector to allow the country to become a serious competitor to all world companies," Akhmetov was quoted as saying.
Kazakhstan has set up several working groups, in particular with Lukoil, which is to build a gas chemical complex near the Khvalynskoye field in the Caspian Sea, Akhmetov said. The project envisages processing of over 14-bil cu m/yr of gas at the field.
Akhmetov also mentioned LG and Shell, among other companies, negotiating the issue with the government. Usage of advances technologies are among Kazakhstan's main conditions for participating in the projects, Akhmetov said.
The national KazMunaiGaz is to represent Kazakhstan in the projects, where the government plans to hold at least a 50% interest.
Kazakhstan plans to raise gas production to 1.2-trillion cf in 2005, up 65% from 720 Bcf last year, and to increase gas output further to 1.66-tril cf by 2010, according to KazMunaiGaz.


Foster Wheeler 2005/12/15

Foster Wheeler Awarded Detailed Feasibility Contract In The Republic Of Kazakhstan

Foster Wheeler Ltd.announced today that its Italian subsidiary Foster Wheeler Italiana S.p.A. has been awarded a contract by KazMunaiGas Exploration and Production (KMG EP) for a detailed feasibility study for a new petrochemical complex and related facilities to be built in several locations in Western Kazakhstan. KMG EP is the state-owned oil and gas company of the Republic of Kazakhstan. The terms of the award of the study, which will be included in Foster Wheeler's fourth-quarter 2005 bookings, were not disclosed.

The proposed facilities, for which the expected final total investment cost is in excess of $4 billion, would be built in two phases. Phase 1 would include a gas separation unit to be built near the town of Kulsary to treat dry gas from the
Tenghiz field and separate ethane and propane, and a petrochemical complex to be built near the city of Atyrau to process the ethane and propane and produce polyethylene and polypropylene. Phase 2 would include an additional gas separation unit to be built in Karabatan to treat dry gas from the Kashagan field and expansion of the Atyrau petrochemical complex. The final capacity of the Atyrau complex would be up to 1,500,000 tons per year of polyethylene and up to 450,000 tons per year of polypropylene.

gWe are delighted to have been selected by KMG EP and to have the opportunity to participate in such a large and prestigious investment that would contribute substantially to the Republic of Kazakhstan's industrial development. This award reflects the quality and the depth of our technical and project execution expertise, and also our considerable petrochemicals and gas processing experience,h said Giorgio Veronesi, project director and executive sponsor of Foster Wheeler Italiana's projects in the Commonwealth of Independent States (CIS).

gWe have selected Foster Wheeler Italiana after an international competitive tender, in accordance with Kazakhstan State purchasing rules. We were pleased with Foster Wheeler's tender: its competitive pricing, aggressive schedule and its proposed execution strategy for the study,h said Roustem Bekturov, deputy general manager of KMG Exploration and Production.

The feasibility report is expected to be completed in the first quarter of 2006. The facilities are expected to be mechanically completed between 2009 and 2012, depending on the final selected configuration and execution scheme.

Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemicals, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. For more information about Foster Wheeler, visit our Web site at

2006/3/31 Basell

Basell signs MoU with KazMunayGaz and SAT for petrochemical complex in Kazakhstan

Basell signs memorandum of understanding with KazMunayGaz and SAT for first integrated worldscale petrochemical complex in Western Kazakhstan

Following a meeting with Daniyal Kenzhetayevich Akhmetov, Kazakhstan
fs Prime Minister, Basell has signed a memorandum of understanding (MOU) with KazMunayGaz Exploration & Production (KMG EP) and SAT & Company (SAT) confirming their intention to construct and operate a new petrochemical project in Kazakhstan.

The project is expected to include
an ethane extraction unit in Kulsary and an integrated petrochemical complex in Atyrau. The planned petrochemical complex includes a worldscale ethane cracker and polyethylene facilities, as well as a propane dehydrogenation unit and polypropylene facility. Start up is planned for 2010.

gThe signing of this MOU highlights the rapid progress achieved and marks a key milestone in the preparation of this important project,h said Volker Trautz, CEO of Basell, who participated in the recent meeting with the Prime Minister. gWhen operational in 2010, this facility will establish a new benchmark for the polyolefins industry. The polypropylene and polyethylene units will use Basellfs latest generation process technologies, so manufacturing costs will be among the lowest in the industry, while benefiting from a broad product capability.h

Trautz added, gThey will also benefit from advantaged feedstocks, since they will be integrated with local gas supplies. As the leading polyolefins supplier worldwide and the largest polyethylene producer in Europe, Basell will provide sales and marketing support for the project.h

In addition to providing technology and sales and marketing services, Basell intends to participate directly as a shareholder in the project.

KazMunayGas (KMG) was founded in 2002 as a result of the merger of CJSC National Oil Company Kazakhoil and NC Oil and Gas Transportation. This state owned company was created with the goal of developing Kazakhstanfs oil and gas resources. KMG EP is the operating subsidiary responsible for exploration and distribution of oil and gas. KMG is also a shareholder in TengizChevrOil (TCO) and Agip KCO.

SAT is a privately owned, diversified conglomerate with industrial, commercial and service activities.

Basell is the world's largest producer of polypropylene and advanced polyolefin products, a leading supplier of polyethylene and catalysts, and a global leader in the development and licensing of polypropylene and polyethylene processes. Basell, together with its joint ventures, has manufacturing facilities around the world and sells products in more than 120 countries. Additional information about Basell is available at

Kazakhstan's Sat & Company and Exploration Production KazMunaiGaz are shareholders of Atoll.

Atoll owns the biggest petrochemical plants in Kazakhstan - the Atyrau plant Polipropilen and Sat Operating Aktau, a polystyrene plant (formerly Aktau Plastics). The plants are located in the Atyrau and Mangistau oil producing regions.


Earlier this year, Basell was reported to be mulling plans to acquire a 35% stake in Kazakhstan Petrochemical Industries (KPI) from the holding company Sat & Co. After this acquisition, Sat & Co. would continue to be the largest shareholder with 50%, while KMG would hold the other 15%.

KPI, formerly Atoll, already controls the Aktau Polystyrene Plant and Atyrau Polypropylene Plant. The Aktau plastics plant has a designed capacity of 300,000 tons/year of styrene and 54,000 tons/year of polystyrene, while the Atyrau Polypropylene Plant has a designed annual capacity of 30,000 tons/year of polypropylene. Production at the Aktau Plastics Plant has been halted since August 2003, but it was re-launched two years ago.

The Atyrau petrochemical complex is the latest component of a series of Kazakhstan's planned homegrown projects. Back in 2002, Agip KCO, the international consortium exploring the potential of Kazakhstan's Kashagan field in the Caspian Sea, indicated tentative plans to build a gas processing plant in Karabatan, some 20 miles from Atyrau. The facility was expected to become a major source of sulfur for the global market, but the project proved slow to materialize.

In October 2005, the Kazakh government drafted a $7 billion national plan to develop the petrochemical sector, which envisaged building a total of nine new petrochemical plants. The new facilities would produce ethylene, propylene, styrene, benzene, polyethylene, polypropylene, polystyrene, methanol, and mono-ethylene-glycol, according to the government blueprint. The blueprint envisaged creation of some 60,000 new jobs in the petrochemical sector in the coming 15 years.

In April 2007, KMG indicated plans to build a $1.2-1.5 billion natural-gas-processing plant at Karachaganak. KMG head Uzakbai Karabalin told a government meeting that KMG would start construction of the plant in late 2008 or early 2009 and that the facility would have an annual capacity of 5-7 billion cubic meters of gas (Kazinform, April 18).

The Kazakh government was reported to be considering overseas petrochemical projects as well. In March 2007, KMG was reportedly interested in joining a $4.9 billion project to build a 300,000 barrel-per-day refinery in the Turkish Mediterranean port of Ceyhan in partnership with Calik Energy and Indian Oil. Kazakhstan's interest in the project was understood to be connected with the possibility of transporting Kazakh crude supplies via the Baku-Tbilisi-Ceyhan pipeline.

There were also plans for Russia's direct involvement in petrochemical and gas processing projects in Kazakhstan. In November 2005, then-Kazakh Prime Minister Daniyal Akhmetov announced that KMG and Russian oil major Lukoil planned to build a joint gas-chemical complex in the Caspian littoral region of Western Kazakhstan. It was supposed to process gas from offshore fields, jointly developed by Kazakh and Russian companies. However, neither side has announced concrete moves to implement this project.


2006/8/16 Chemweek's Business Daily

Basell to Enter Kazakhstan Petchem JV Soon

Basell will acquire a 35% stake in Kazakhstan Petrochemical Industries (KPI; Almaty) from Sat & Co. (Almaty) by the end of this summer, paving the way for KPI to build a previously announced $4-billion petrochemicals complex at Atyrau, Kazakhstan, KPI says. Sat & Co.'s stake in KPI will fall from 85%, to 50% following the transaction. The remaining 15% of KPI is held by government energy group KazMunayGaz Exploration & Production (Almaty).

About $1.2 billion of the planned investment will be financed by the joint venture partners and the rest will be provided by international project financing, KPI says. Construction will start in the third quarter of next year and completion is expected three years later.
The complex will use Basell technology and have capacity for
400,000 m.t./year each of low- or high-density polyethylene; linear low density polyethylene; and polypropylene (PP).
400,000-m.t./year propane dehydrogenation unit will provide feedstock to the PP plant.

May 17, 2007 Reuters

Kazakhs plan $5 bln petrochemical plant

Kazakhstan's state energy firm Kazmunaigas will start building a $5.2 billion petrochemical plant near the giant Kashagan oil field in December, a Kazakh energy ministry official said on Thursday.

"We in Kazakhstan have large amounts of gas with ethane presence of between 13 to 16 percent. So it makes perfect sense to build a petrochemical complex," said Raushan Sarmurzina, head of the ministry's technology development department.

The plant would annually produce 1.2 million tonnes of ethylene, polyethylene and polypropylene and would process gas from the giant Tengiz oil field, led by U.S. Chevron, in its first stage.

It would later also process gas from the huge offshore Kashagan field, led by Italy's Eni.

Netherlands-based Basell Holdings BV, a big polypropylene producer, is named as a strategic partner in energy ministry documents detailing the project.

The plant is expected to be built in three to five years by an operating company, Kazakhstan Petrochemical Industries, set up by KazMunaiGas and SAT & Company, a private Kazakh company with petrochemical and airlines interests.

Sarmurzina said the project will be financed by KazMunaiGas itself, the government and investors.

The Tengizchevroil (TCO) joint venture has developed the Tengiz field since 1993. The major partners in Tengizchevroil are Chevron (50% ownership), ExxonMobil (25% ownership), the Kazakhstani government through KazMunayGas (20% ownership) and Russian LukArco (5%).

Kashagan Field is an oil field located in Kazakhstan. The field is situated in the northern part of the Caspian sea close to the Kazakhstan city of Atyrau. The field was discovered in 2000. The field is operated by Eni under the North Caspian Sea Production Sharing Agreement. The Agreement is made up of 7 companies consisting of Eni (18.52%), Shell (18.52%), Total (18.52%), ExxonMobil (18.52%), ConocoPhillips (9.26%), KazMunayGas (8.33%), Inpex (8.33%). The original group included BG Group instead of KazMunayGas; however BG sold its stake to the partners in 2004. Eni operates this project under the JV company name of AgipKCO (Agip Kazakhstan North Caspian Operating Company N.V.)


One of the larger discoveries of this decade, it is estimated that the Kashagan Field has commercial reserves from 9 to 16 billion barrels of oil. The field is offshore in a harsh environment, where sea ice is present in the winter and temperatures from -35 ‹C (-31 ‹F) to 40 ‹C (104 ‹F)can be encountered. Production is expected to begin either in 2008 or 2009, later than the initial plan date of 2005. Currently (2006) the original concept is being redesigned and first oil may be even later, probably on Q3 of 2010. It has designated as the main source of supply for the Kazakhstan-China oil pipeline.[1]



Platts 2007/9/25

Kazakhstan, Chevron to agree on Tengiz gas price for petchem unit

KazMunaiGaz expects within a month to agree with TengizChevroil--the Chevron-led consortium developing the giant Tengiz field in western Kazakhstan--on the price of gas deliveries to a new planned petrochemical complex, a source close to the project told Platts Tuesday.

"I think they will agree on the price within a month," the source said.

As soon as the price is agreed, the final decision on the construction of the petrochemical complex will be taken, he said.

The parties are negotiating deliveries of some 7 billion cu m/year of gas from Tengiz, he said.

KazMunaiGaz together with private Kazakhstan's company SAT, which is operator of the petrochemical project, plans to build the facility with throughput ethylene capacity of 1.2 million mt/year.

The unit is to produce
800,000 mt/year of polyethylene, and 400,000 mt/year of polypropylene.

The construction of the $5 billion project is expected to start in 2009, with the commissioning planned for late 2012.

During the first stage of the project gas from Tengiz will be the only source of feedstock for the petrochemical unit. At the second stage, the expansion is possible taking into account future deliveries from Kashagan, another huge field in Kazakhstan. The start-up of production at the Kashagan field, operated by Italy's Eni, has been repeatedly delayed and is now expected after 2012.


Kazakhstan Petrochemical Industries, a 50:50 joint venture between KazMunaiGaz and SAT, operating the petrochemical project, is currently negotiating with major foreign companies over their possible participation in the project, the source said.

"They are looking for a strategic investor which will bring into the project its own technology, access to market, and finance," he said.

He mentioned Basell and Dow Chemical and "some Chinese companies" among the firms with whom the talks are under way.

Currently KPI plans to invest 30% of its own funds in the project with the remaining 70% to come from other sources.


September 26, 2007 Posted by SRI

Kazakhstan Seeks A Foreign Partner for a Five-Billion-Dollar Petrochemical Project

By the end of 2007, KazMunaiGas and SAT & Company hope to find a partner to build a new petrochemical complex in Kazakhstan. The speaker of the Kazakh national oil company announced that KazMunaiGas is currently conducting talks with a number of foreign companies, including Netherlands-based Basell, US-based Dow Chemical, and also several Chinese and Japanese companies. The plant would annually produce
1.2 million tons of ethylene, polyethylene and polypropylene and would process gas from the Tengiz oil field, led by U.S. Chevron, in its first stage. It would later also process gas from the Kashagan field, led by Italyfs Eni.

Currently, KazMunaiGas is conducting negotiations with Tengizchevroil, the operator of the Tengiz field, about the price of the crude that will be used in the new complex. These negotiations should be concluded within a month when KazMunaiGas
- along with SAT & Company - will announce its foreign partner. The new foreign partner will receive an equity stake in the $5 billion project although it is not yet clear which of the current partners will cede its stake.

The construction of the project is set to begin in 2008 and finish in 2012, and it appears likely that its capacity will be expanded to accommodate crude from Kashagan. The construction of this complex is part of Kazakhstan
fs drive to take ownership of and develop its domestic petrochemical industry.




Jan 8, 2008 WAM Abu Dhabi

IPIC signs a MoU with KazMunayGas

International Petroleum Investment Company (IPIC) and JSC NC " KazMunayGas", Kazakhstan's national oil-and-gas company signed a Memorandum of Understanding for cooperation in construction of a petrochemical complex in Western Kazakhstan.

KazMunayGas JSC NC is the biggest oil-and-gas company in Kazakhstan and a major player in the field of discovery and production of oil and natural gas.

A source at IPIC said that a feasibility study on the project is underway, and the details will be announced later. He added that the two companies have agreed to exchange expertise and technology to boost the project. Both companies IPIC and KazMunayGas would assert their intention to develop and tighten the relationship and cooperation between them.

The total worldwide investments of IPIC, the Abu Dhabi state enterprise responsible for foreign investments in the oil and chemicals sector, is valued at USD 11b.

Earlier last year IPIC had announced that it will increase its investments to USD 20b dollars in the next 5 years to promote Abu Dhabi as a strategic investor in oil and energy industry in the world.