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Kazakhstan's Kashagan oil facilities supply power to national grid after outage


Second-highest oil producer suffers knock-on power supply impact

Supergiant fields increasingly needing to meet domestic needs

  • Author
  • Nick Coleman
  • Editor
  • Daniel Lalor
  • Commodity
  • Electric Power Natural Gas Oil

Kazakhstan's giant Kashagan oil field facilities were affected by a power outage that hit a swath of industrial facilities, oil fields and consumers this month, but have now started contributing power to the grid, the North Caspian Operating Company said.

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In an emailed comment, the Kashagan operator, NCOC, said a "plant shutdown occurred at the Onshore Processing Facility (OPF) due to external disturbance from the power grid" on the afternoon of July 3.

"The plant was restarted on the same day. Furthermore, at the request of the local authorities and in co-operation with [grid operator] KEGOC, NCOC has been exporting around 10-15 MW of electricity to the regional grid from its power generation system starting July 4," NCOC said.

Kazakhstan's largest crude production facilities and the associated export pipeline system all have backup power generation facilities to ensure continuity.

But a variety of impacts were felt as a result of the outage at the MAEK power plant, an aging gas-fired facility in Mangystau province near the Caspian coast, on July 3.

Kazakhstan's CPC Blend exports typically amount to 1.5 million b/d, including a small portion -- around 10% -- from fields in Russia's section of the Caspian Sea. The Kazakh-origin crude is not subject to sanctions in relation to the war in Ukraine.

All three of the main fields -- Karachaganak, Kashagan and Tengiz -- entail major power consumption to strip out sulfur and reinject gas. Power is also consumed by the 1,500 km CPC pipeline route across southern Russia to the port of Novorossiisk on the Black Sea, including some 15 pumping stations.

While such facilities have back-up power systems, there is a growing move for the supergiant fields to also meet Kazakhstan's domestic needs, particularly for gas and petrochemical projects.

Russian reliance

Data from Kazakhstan's energy ministry for July 9 showed oil production running around 10% below normal. The main fields affected were smaller, more depleted fields with aging facilities that supply heavier crude for the domestic market or export the crude via Russia's Transneft pipeline system.

Since Russia's invasion of Ukraine, Kazakhstan has been trying to reduce its reliance on the CPC system, which exports around 80% of the country's oil.

Concerns have risen that the route might fall foul of the conflict, possibly being used as a political tool in the standoff between Moscow and countries opposed to the invasion.

A number of disruptions to the CPC Blend supplies occurred in 2022, with the main blame attributed to storm damage to the loading facilities at Novorossiisk.

Platts, part of S&P Global Commodity Insights, assessed CPC Blend at a $1.95/b discount to North Sea benchmark Dated Brent on July 7 on a CIF (cost insurance freight) basis.