ALMATY, Jan 25 - Partners in the Karachaganak gas project in Kazakhstan will need to invest $14.5 billion to bring its third phase into production, an 80 percent cost hike on the previous estimate, state oil and gas firm KazMunaiGas said.
KazMunaiGas [KMG.UL] issued the revised estimate in a paper published on its website, www.kmg.kz, on Monday. The partners in the Karachaganak project include Britain's BG Group (BG.L) and Italian energy major Eni (ENI.MI).
The previous cost estimate for the third phase, which dates back to 2007, was $8 billion.
The new estimate was given in a paper outlining an address by KazMunaiGas Chief Executive Kairgeldy Kabyldin on Jan. 15 to Kazakh Prime Minister Karim Masimov, in which he outlined the main tasks ahead of the state energy company in 2010.
These would include negotiations on the third phase of a project which could more than double natural gas production to 39 billion cubic metres on completion from 15 bcm last year.
Kazakhstan wants a stake in the Karachaganak project, the Central Asian country's largest gas producer. Its owners, also including Russia's LUKOIL (LKOH.MM) and U.S. firm Chevron (CVX.N), have accused the government of levying extra duties.
Energy Minister Sauat Mynbayev said at the Jan. 15 meeting with Masimov that "intensive negotiations" were taking place in order to resolve the dispute. This was one of the sector's key tasks for 2010, he said. [ID:nLDE60E0RX]
Oil and gas condensate production at Karachaganak is scheduled to rise to 16.5 million tonnes a year on completion of the third phase from 11.5 million tonnes in 2009, Kabyldin said in the presentation.
Gas sales alone are seen doubling to 16 bcm from 8.2 bcm in the same comparison.
The Karachaganak field, located in Western Kazakhstan, is estimated to hold 1.2 billion tonnes of oil and gas condensate and 1.35 trillion cubic metres of natural gas.
The project operators sued Kazakhstan last year to recover over $1 billion in export duties and other payments, but suspended legal proceedings in October.
KazMunaiGas [KMG.UL] issued the revised estimate in a paper published on its website, www.kmg.kz, on Monday. The partners in the Karachaganak project include Britain's BG Group (BG.L) and Italian energy major Eni (ENI.MI).
The previous cost estimate for the third phase, which dates back to 2007, was $8 billion.
The new estimate was given in a paper outlining an address by KazMunaiGas Chief Executive Kairgeldy Kabyldin on Jan. 15 to Kazakh Prime Minister Karim Masimov, in which he outlined the main tasks ahead of the state energy company in 2010.
These would include negotiations on the third phase of a project which could more than double natural gas production to 39 billion cubic metres on completion from 15 bcm last year.
Kazakhstan wants a stake in the Karachaganak project, the Central Asian country's largest gas producer. Its owners, also including Russia's LUKOIL (LKOH.MM) and U.S. firm Chevron (CVX.N), have accused the government of levying extra duties.
Energy Minister Sauat Mynbayev said at the Jan. 15 meeting with Masimov that "intensive negotiations" were taking place in order to resolve the dispute. This was one of the sector's key tasks for 2010, he said. [ID:nLDE60E0RX]
Oil and gas condensate production at Karachaganak is scheduled to rise to 16.5 million tonnes a year on completion of the third phase from 11.5 million tonnes in 2009, Kabyldin said in the presentation.
Gas sales alone are seen doubling to 16 bcm from 8.2 bcm in the same comparison.
The Karachaganak field, located in Western Kazakhstan, is estimated to hold 1.2 billion tonnes of oil and gas condensate and 1.35 trillion cubic metres of natural gas.
The project operators sued Kazakhstan last year to recover over $1 billion in export duties and other payments, but suspended legal proceedings in October.
