First Oil Finally Shipped from Kashagan

Published at 04:38PM - 14/10/16

After several years of delays, the first oil batch has finally been shipped from the Kashagan offshore field, located in the Caspian Sea.

According to the North Caspian project operator NCOC, the Kashagan Phase 1 offshore project has started and the onshore processing plant has dispatched the first batch destined for export.

“Work is ongoing to safely and gradually increase production capacity to a target level of 370,000 barrels per day (bpd) by the end of 2017”, the company said in a statement.

First Oil Finally Shipped from Kashagan

According to media sources, the operators of the field have shipped 7,700 tonnes of oil through the CPC pipeline and 18,800 tonnes through a pipeline operated by the state-controlled company KazTransOil.

The giant oil field, one of the largest worldwide, is expected to account for a significant part of Kazakhstan’s oil production gains, with an estimated 16 billion barrels of oil.

First Oil Finally Shipped from Kashagan
Kashagan export plans

However, the project has been plagued by a series of setbacks since the beginning, with production halted in October 2013, less than a month after it started, due to a fault with a pipeline, which caused offshore gas leaks.

Kashagan Could Produce 37,000 bpd by End-2017

After the causes were assessed, NCOC decided to fully replace the affected offshore pipelines and contracted Saipem for new pipelines in February 2015.

Saipem built and installed two 59-mile pipelines for US$1.8 million (£1.47 million), which led project costs to ramp up to US$53 billion (£43.46 billion).

The Kashagan oil field, one of the largest oil finds over the last 40 years, holds an estimated 35 billion barrels of oil in place. According to Eni, targeted production could reach 370,000 bpd by the end of next year.

Eni holds a 16.81% stake in the consortium that operates the field, together with NCOC. Other partners in the venture include KazMunayGas, ExxonMobil, Shell, Total, CNPC and Inpex.