Replacement of equipment at Kashagan will cost 100 million dollars

By Laura Suleimenova

Ak Zhaik newspaper has learnt about the cost of the new compressors that NCOC is planning to install at the off-shore and on-shore oil and gas processing units (Bolashak processing plant) instead of old ones. Therefore, the version that one of the reasons for pipelines failure was an insufficient drying of gas at the on-shore unit was confirmed.

IT BECAME CLEAR THAT THEY’D BETTER BE REPLACED

According to our sources, 7 gas compressors of instant evaporation at 4 units of Bolashak plant and 3 similar compressors on D island. The total contract price of the above equipment is $79 million, excluding construction, installation and commissioning costs. If to take all expenses into account, then the total expenses for replacement of compressors should make over $100 million.

“NCOC is replacing compressors because they probably understand now that the old equipment may cause problems during the re-start. The question is, how they selected the equipment for the project in the past,” – said to us earlier the sources in the consortium.

It is also became known that instead of 4 compressors (two - for Stage 1 and two – for Stage 2), NCOC is going to replace only 3, because during the project development instead of 3 process lines they have only 2 lines left.

Therefore 2 compressors will be installed on each line and 1 compressor will be the stand-by.

AGREED QUIETLY

Earlier Reuters agency reported about two options of the cost for pipelines repairs referring to the materials of the Energy Ministry presented to the RoK Parliament Mazhilis. According to the basic option it was envisaged to use the pipes manufactured  as per L360 (X52) specification that would cost $1,6 billion with high risk of repeated leaks. The alternative option provides for the use of  pipes of L415 (X60) specification covered with incorrodable alloys that that increased the costs up to $3,6 billion. According to Reuters’ sources the consortium, for certain, will choose the second option -  although it is costly.

It appears that in total the pipelines and compressors replacement costs will make about $4 billion. With KMG Oil Company share of 16,88% in the North Caspian project the expenses of the Kazakhstan shareholder should make about $700 million. However, there is a probability that between KMG and other shareholders a compromise will be reached on this issue. To recall, in December of last year after the meeting of RoK Government representatives with Kashagan project operator - NCOC and other NCPSA participating companies, a certain Agreement has been signed, the conditions of which are declared confidential. The only information provided was the fact that “The Republic of Kazakhstan, NCOC and NCPSA participants settled a number of the production, financial and environmental issues that arose in the last several years”.

The Consortium to our official request about compressors responded round the corners: “The development of such a difficult project in harsh off-shore conditions of the Northern Caspian Sea require implementation of the advanced approaches and technologies. All processing equipment is regularly checked against the approved schedule, and in necessary cases it is either  replaced or repaired”.