Журнал KAZENERGY 2013. №2 (57)

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, 2013.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 2013.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 2013.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