​Kashagan as premonition (+update)

By Laura Suleimenova

The North Caspian project operator - NCOC consortium continues the construction of oil and gas flow lines. According to Ak Zhaik information the activities are ccondcuted ahead of schedule.

IN ACCELERATED TEMPO

The order for 130 km of pipes have been placed with the German producer Butting GmbH and Co. KG. At the beginning of April 18 km have been already fabricated. The production of pipes for conducting qualification tests at Japanese plant - Marubeni Itochu Steel Inc. is ongoing. Then Japanese pipes will be sent to Ersai LLP (Ersai Caspian Contractors), Saipem's subcontractor that won pipelines construction bid, for conducting qualification tests of welding technology. The first lot of 2,4 km pipes was sent on March 24, and they arrived to Kazakhstan on April 17. The second lot (1,8 km) has been sent on April 3. The lot is expected to arrive on May 8. In total, 14,1 km of Japanese pipes will be delivered to Kazakhstan till June 19.

Parallel to those activities, Saipem and Serimaks continue qualification tests of welding technology. Then it is planned to carry out mechanical tests and other laboratory tests on welded seams.

It became known that during qualification tests of internal plasma welding technology (IPW) that will be used offshore, 3 out of 50 welded seams had identical cracks. "Еrsai" studied this problem and eliminated it by adjusting welding parameters. Currently IPW welding parameters have been corrected properly and successfully passed qualification tests on 5 seams that were welded in sequence.

Besides, NCOC cut out a sample of welded seam from pipeline located between A and D islands and sent it to the Institute of welding in Great Britain for laboratory testing.

In compliance with the RoK Environmental Code, digging of trenches in shallow areas of the sea have been suspended as of April 1. The commencement of trench digging activities in the transitional zone from land to sea was planned for April 1, but because of drop of sea water level by 2 meters the activities were postponed till April 13.

To recall, currently NCOC pursues to modify RoK Environmental Code that forbids construction activities in the northeast part of the Caspian Sea during the period from April 1 to July 15 (see "Rushing at Kashagan barged into law").

Though in their response to our official inquiry NCOC didn't mention anything about their efforts in this direction, having mentioned only that scheduling and organization of forthcoming project activities "are carried out in accordance with the ROK legislation requirements".

"THEY WILL OBSERVE OUR LAW"

The RoK Ministry of Energy replied that in accordance with pipeline construction schedule of works presented by the contractor of the North Caspian project that envisages to compete the activities by December 2016, construction activities at preserved areas of northern part of the Caspian Sea will not be performed during the period from April 1 till July 15. And in case of violation of Environmental Code the violating parties will be held "responsible in accordance with the current legislation".

The RoK Ministry of Agriculture under the authority of which comes the committee of forestry and fauna, reported that it considered the materials of impact assessment of the project on environment (EIA).

"According to Article 17 of the RoK Law "On protection, reproduction and use of fauna" the project envisages activities aimed at preservation of habitat, conditions of reproduction, ways of migration and places of concentration of animals. According to the corresponding technique approved by the order #154 of the RoK Minister of Environmental Protection dated May 31, 2013, the calculations of possible damage to fish resources have been made. Terms of work are planned taking into account the restrictions set by item 2 of Article 257 of the RoK Environmental Code. In northern part of the Caspian Sea the opportunities for development of fishery, water transport, state geological survey, exploration and production of hydrocarbons taking into account the special requirements established by the RoK Envirnmental Code" – reads the official reply of the Ministry.

Actually, it follows from the answers that NCOC hasn't got the permission from the Kazakhstan party yet to speed up construction activities of new pipelines. But the issue is not only in environment. As it became known, contrary to the reached agreement (see "Everything was written off and still remained endebted to all"), foreign partners of the consortium are trying to present the expenses for construction of new pipelines as production upgrade. Something like, this time the amount of works are more difficult compared to the construction of primary pipelines. For example, having made secure this time, NCOC decided to import already concreted pipes into Kazakhstan, and do automatic welding by excluding the influence of human factor.

However the Kazakhstan party has not been reassured by the arguments presented by the consortium.

One of the indicative examples of constant problems at Kashagan is the story with compressors at offshore complex and Bolashak plant that should also be replaced (see "Replacement of equipment at Kashagan will cost 100 million dollars"). Their capacity simply appeared to be insufficient for a gas boost, and moisture together with hydrogen sulfide got inside the pipelines putting them out of commission.

A DROP IN THE OCEAN

So far, the adherence to principles demonstrated by the Kazakhstan party concerning the observance of ecological legislation is, of course, laudable, but it is still insignificant, if to take into account the future scales of oil operations in the Caspian Sea. We shouldn't forget that the present status of the Kashagan project is an experimental program. At this stage by the end of 2016 the consortium plans to start oil production and bring it to 450 thousand barrels per day – the capacities that the existing offshore and onshore facilities are designed for. Meanwhile the geological reserves of Kashagan make 4,85 billion tons, out of 1,47 billion tons are recoverable.

That is the second phase of the project, when in the northeast of the Caspian Sea will follow

In other words the second phase of the project will commence when in the northeast of the Caspian Sea there will be more offshore facilities and at Karabatan - new plants that are similar to "Bolashaka". And that is only Kashagan, since there are other big contract sites, though smaller in scales compared to Kashagan, such as Aktoty (77 million tons), Kairan (36 million), Kalamkas-Sea (32 million), Southwest Kashagan (6 million). In light of these future scopes that have been already given to the consortium within the Production Sharing Agreement framework, the prohibition of works for three months looks like a drop in the sea that we are losing.