FGP: a project of disputes

Kazakhstan’s Ministry of Environmental Protection (MEP) disapproved the Tengiz field future growth project (FGP).

Forgot about earthquakes

We obtained the resolution of State Expert Reviewers of MEP’s Environmental Regulation Committee dated July 11, 2012, signed by the Head of Environmental Expert Review Directorate Sholpan SULEIMENOVA, that reads the state expert review did not align FGP and construction’s feasibility study with Environmental Impact Pre-Assessment.
TCO had been required to mandatorily submit several options of the project for an expert review, but they provided only one option. It is also mentioned that the area seismicity level in the document is estimated as 5 on Richter scale, but potential earthquakes of industrial character were not considered, besides, they failed to conduct a subsurface geodynamic modeling of the area.  
MEP experts also expressed their serious concerns over the lack of the evaluation of possible influence of FGP facilities on the water zone of the Caspian Sea. Also, the option of unit construction of the future plant envisages a sea transit of large-dimension cargo and modules across the preserved area of the sea. Therefore Tengizchevroil was proposed to conduct a preliminary assessment of environmental impact on the sea and the basin of the Ural River or consider other alternatives.
The FGP’s technology of injecting the whole volume of produced gas also caused concerns. Experts recommended thinking about other alternatives with account of environmental aspects.

Go and modify

One shouldn’t assume the conclusion of MEP’s experts separately from the pretenses of the Kazakh side against FGP voiced in the early summer. To our enquiry National Well Being Fund Samruk Kazyna had shortly answered that during the consideration of FGP will be taken into account the country’s stakes both during contract and post-contract periods, as well as in the Kazakh content. Aligned decision on the project will be made by the end of this year. And during the visit of Umirzak SHUKEYEV, the head of the fund, he stated that the fields should be used for the benefit of people not only during the contract with investors, but after its expiry date as well.  

What does the resolution mean?

In accordance with Article 51 Part 3 of the RoK Environmental Code dd. 09.01.2007, in case state experts issue a negative resolution, a client should ensure modification of the provided materials to comply with proposals and remarks given by experts in the resolution and submit them for a repeated expert review or abandon the intended activity.
Judging by the nature of the remarks on the project, it is subject to serious modification, what means another delay and additional expenses for TCO.

By Laura SULEIMENOVA