доклады, презентацииAll deliveries of diesel fuel for the sowing, harvesting were100% made with a discount. The discount, as you see, wassignificant.Social oil supply is on schedule. The preparation of thiswork for 2013 is also on schedule.Now, regarding gas... Production has increased, respectively,production of dry sales gas increased by 2.3%.The forecast of raw gas production for 2013 under the MOGStrategic Plan is 40.5 billion cubic meters, the production ofsales gas is planned to increase to 22.1 billion cubic meters.Sales Gas BalanceAccording to the Agreement on the Counter Gas Deliveriesconcluded between Gazprom, Uzbekneftegas and KMG, allgas import shall be “swapped” with Karachaganak export at anequal price and in equal volumes.The volume of gas export with the account of such SWAPoperations totaled 11.2B cubic meters (101.8% against 2011).Domestic sales gas consumption increased by 2.9% andtotaled 10.5B cubic meters in 2012.In 2012, the amount of 13.5B KZT was allocated from thenational budget to buildout the gas transmission system;construction was complete under 43 projects; approximately600km of gas line was constructed. This resulted in thepossibility to supply gas to 60 populated areas in 8 regionsof the country.RK Gas Transmission Lines MapAccording to the President's message to people of Kazakhstandated January 27, 2012 the Tobol-Kokshetau-Astana GasTransmission Line Construction Project is being worked outto gasify Astana and northern regions of the country, whichwill provide natural gas supplies to the previously non-gasifiedregions of the country.Currently, feasibility studies and design estimates havebeen developed for the project, as well as financing by theSamruk-Kazyna bailout funds is negotiated.Russian raw gas, delivered by the equivalent scheme (SWAPoperations) from the Western Kazakhstan fields, is plannedto use as a raw materials source for the Project. In future,gas might be delivered from the planned Karachaganak GasProcessing Plant (further - KGPP), which also was mentionedin the President’s message.The construction Project of the second section of theKazakhstan – China gas transmission line along Beineu-Bozoy-Shymkent route is in progress; as well as the construction andassembling operations have been commenced in August 1,2012 to fulfill the President’s task.The Bozoy-Shymkent section is planned to put intooperation by October, <strong>2013.</strong> Works on Beineu-Bozoy willbe expedited. Previously, construction commencement wasplanned for 2014; this date will be transferred to <strong>2013.</strong>Production of Liquefied Gas, Domestic Consumption andExports in 2011-2013The level of the liquefied gas consumption by publiccommunity and municipal services remained at the 2011level.The volume of production increased by 3% against 2011.The export increased by 4.6%.96.5B cubic meters (99.8%) of gas were transited viaKazakhstan. In the whole, the 2012 gas transit level is equalto 2011.However, purposed at the increase of the transit and exportpotential of the country, the construction of the third line ofthe Kazakhstan – China gas transmission line is planned withcapacity of 25B cubic meters a year.In October 27, 2011, the Parties signed the Protocol onAmendments and Additions to the Agreement betweenthe Government of RK and the Government of PRC onthe cooperation in the construction and operation of theKazakhstan – China gas transmission line, which is currentlypassing through internal procedures on entry into effect.Gas Flaring VolumesIn the course of the Gas Recovery Program implementation bysubsoil users, the amount of gas flared made 1.0 billion cubicmeters and decreased by 15% compared to 2011.At the end of 2012, KazMunayGas, JSC and KazahoylAktobe,LLP failed to complete the Gas Recovery Program in a timelymanner. Other companies, flare in accordance with the law,only within the approved limits of a so-called technologicallyinevitable combustion. The Gas Recovery Program was98№2 (<strong>57</strong>), 2013
prolonged for the above two companies by the ERMconsidering Social Impact on production suspending.General Contractual InformationNo bids were held under the Standstill Agreement.As of today, the country has registered 203 contracts onthe raw hydrocarbon deposits use, including 172 (84.7%)contracts have numeric obligations on the local content and31 (15.3%) do not have numeric obligations.21 contracts out of them have the Protocols signed onthe (minimum) local content obligations undertaken since01.01.2012. Currently, the MOG is working on fixing numericobligations in the subsoil contracts.Regarding local human resources, in 2012the Ministryarranged for education financial backing for 4,515 citizensof Kazakhstan on the most demanded technical oil and gasprofessions from pending disbursements in the amount of25.3M USD. With this, 4,237 students will be employed.Refinery Upgrade ProjectsRegarding the Atyrau Refinery Upgrade Project onConstruction of the Crude Deeper Conversion Plant; all theissues, including financing, contracts conclusion, workforceand etc. have been settled. Physical work scope shall becomplete in time. Atyrau region Administration was allocatedfunds for people’s relocation due to expansion of the sanitaryprotection zone.The Projects on Shymkent and Pavlodar Refineries Upgradehave been cost estimated, as well as licensed contractors havebeen selected for main process units.In order to expedite Projects implementation, the decisionwas made to integrate the cost estimation phase and theEPC contractor selection, and to order long lead equipment.The work is in progress. The result is that these Refineriesreconstruction works will complete in December, 2015, i.e. inthe same period as the Atyrau Refinery.Investment ProjectsIn 2012, we continued working on implementation of theinvestment projects on the construction of petrochemicalplants on deeper processing of hydrocarbons to producehigher-value added products. I will briefly describe each ofthem.The Aromatic Hydrocarbon Unit (133K tons a year ofbenzene, 496K tons a year of paraxylene) is being constructedunder the Atyrau Refinery Reconstruction and Upgrade Project.The construction and assembling operations are in progresson 16 construction sites, 97 units of process equipment havebeen delivered and their installation has been commenced.Start-up date is December, <strong>2013.</strong>Another petrochemical production is the bitumenproduction at the Aktau Plastics Plant with the least capacity of400K tons a year. The construction and assembling operationsare in progress, 252 units of equipment and materials are atthe site. Unfortunately, routine issues rise regularly betweencontractor, subcontractor and KMG. The Ministry has to beinvolved in these issues settling. The deadlines are under theMinistry’s control.The investment Project on Construction of the IntegratedGas Chemical Manufacture is under a staged implementationto process Tengiz associated gas.The Project will be implemented in two phases: PhaseI (2010-2015) is the formation of the polypropylenemanufacture with the capacity of 500K tons a year; Phase II(2010-2016) is the formation of the polyethylene manufacturewith the capacity of 800K tons a year.Oil supplies to mini refineries decreasedsignificantly, including a part of foreign oil. This isthe result of purposeful work. Given that importsof Russian oil are quoted under the Agreementconcluded with the Russian Federation, thepriority was the utilization of the Pavlodar andShymkent Refineries capacity. While the minirefineries mainly produce vacuum gas oil, heavydistillate fuel and oil composite. These oils arenot in demand in the domestic market, thusexported.Phase I: infrastructure engineering is 100% complete; mainproduction units engineered by principal contractor Sinopecare close to completion.Construction of the Integrated Gas Chemical Plant iscommenced in compliance with the President’s message ofJanuary 27, 2012.Phase II: establishment of a joint venture, commencementof a financial backing arrangement, engineering contractorselection, procurement and construction, main processequipment license holders selection.The investment Project on Construction of the IntegratedGas Chemical Plant will be continued in <strong>2013.</strong>Besides, in 2012, the Ministry jointly with the Samruk-Kazyna and the Integrated Chemical Company, LLP discussedthe issue of implementation of the attractive projects that arecurrently at the stage of feasibility study:• formation of the petrochemical manufacture based onKarachaganak and Kashagan fields stocks;• production of butadiene and synthetic caustic;• production of polymer products in the Mangistau andAtyrau regions.These attractive projects are planned to have a detailedfeasibility study complete and a State Expertise conclusionobtained in <strong>2013.</strong>The List of Oil and Gas Tasks described in theKazakhstan-2050 StrategyThe President has set the following tasks for the Oil andGas Industry:• to develop a strategy on effective management ofhydrocarbon resources;• to cancel the subsoil use moratorium;• to create a strategic “reserve” of hydrocarbon crude;• to focus on the attraction of foreign investments,transfer and the application of up-to-date processequipment in the oil and gas sector; this is thequestion of the local content;• to diversify the investments into deeper conversion,the output of more process goods and higher-valueproducts; I have already told about petrochemicalplants and refineries;• to satisfy domestic demands of high-qualitypetroleum products meeting global environmentalrequirements. By the end of 2016 after completion ofall three Refineries reconstruction, we plan to providethe domestic market with 100% local petroleum oillubricants complying Euro-4, 5 standards.Kazenergy 99