October is proving an active month for Turkmenistan, with the announcement of plans to commission 428 large industrial facilities in the country in 2016 as construction on the East-West gas pipeline approaches completion. In Kazakhstan, although OPEC has downgraded its forecast for Kazakhstan’s 2016 oil production since its September forecasts, KazAtomProm has signed a memorandum of cooperation with US company Centrus Energy in the area of nuclear energy. Finally, further developments in Iran see the country announcing plans to introduce over 50 new oil projects to international investors at upcoming conferences in Tehran and London.

Turkmenbashi oil refinery increases output

New technological units have been commissioned at the Turkmenbashi complex of oil refineries. A consortium of Korean companies, LG International Corp. and Hyundai Engineering Co. Ltd., acted as the principal contractor of the investment project, which is worth approximately $534 million.

The purpose of the units is to increase the output of high-octane motor gasoline that meets international quality standards.

The whole production complex is designed to produce 2 million tonnes of fuel oil per year, and to process 250,000 tonnes of liquefied gas and 230,000 tonnes of low-octane gasoline per year.

Construction of over 420 facilities will start in Turkmenistan in 2016

There are plans to commission 428 large industrial facilities with a total cost of over $9.7 billion in Turkmenistan in 2016.

These facilities include: the Turkmenistan-Afghanistan-Pakistan-India (TAPI) transnational gas pipeline with a capacity of 33 billion cubic metres, a gas-chemical complex for producing 467,000 tonnes of polyethylene and polypropylene, a plant for producing 600,000 tonnes of gasoline by processing natural gas, airports in the city Atamyrat in the Lebap province and the city Garabogaz in the Balkan province, and a plant for producing 1 million tonnes of cement in the Koytendag district of the Lebap province.

In addition, a large number of social facilities will be constructed, including hospitals, houses, health centres, kindergartens and secondary schools.

Turkmenistan signs agreement on gas field

Turkmenistan has signed a framework agreement with a consortium of numerous Japanese companies for the development of part of the Galkynysh gas field.

The agreement has been signed in order to ensure the required volume of natural gas for the TAPI gas pipeline.

Recently, specialists from Turkmengas held a meeting with the representatives of Japanese corporations including Mitsubishi, Chiyoda, Sojits, Itochu and JGC.

The meeting focused on the key issue of the diversification of supplies, particularly the expansion of gas production and processing at the huge Galkynysh field, the reserve of which will serve as the main resource base for the international TAPI project.

OPEC downgrades forecast for Kazakhstan’s oil production

In its October oil market report OPEC has forecast that Kazakhstan’s oil production will decrease by 20,000 barrels per day in 2015 to an average of 1.62 million barrels per day. In contrast, OPEC predicted in its earlier September oil market report that Kazakhstan’s oil production would decrease by 10,000 barrels per day in 2015.

Moreover, OPEC revised a forecast for Kazakhstan’s oil production for 2016. In its October oil market report, OPEC projected that oil production in Kazakhstan will decline by 30,000 barrels per day to an average of 1.57 million barrels per day in 2016, an upward revision of 10,000 barrels per day from the previous month’s forecast.

The report also noted that different sources have said that Kazakhstan’s giant Kashagan project is unlikely to start production before mid-2017.

Kazakhstan mainly produces oil from its largest Karachaganak and Tengiz oil fields.

Turkmenistan completing construction on ‘East-West’ gas pipeline

The construction of the ‘East-West’ gas pipeline is coming to an end, according to Turkmenistan’s Ministry of Oil Industry and Mineral Resources.

The pipeline, which is due to be around 1000 kilometres long, will link together the main gas fields of Turkmenistan in a single gas transportation system and allow the country to significantly increase its export potential.

In particular, it will be possible to sell 30 billion cubic metres of marketable gas from the richest deposits in Turkmenistan to the projected international gas pipeline systems, which start in the country’s west.

The ‘East-West’ gas pipeline can be used to supply Turkmenistan’s gas to Europe, ideally through the construction of a 300-kilometre gas pipeline across the Caspian Sea to the coast of Azerbaijan.

Kazakhstan’s KazAtomProm and US to cooperate on nuclear energy

World Nuclear News has reported that the Kazakh state-run company KazAtomProm has signed a memorandum of cooperation with Centrus Energy that “specifies the development of mutually beneficial relations on competitive supplies of Kazakhstan’s uranium to the world market.”

The document was signed by KazAtomProm’s chairman Askar Zhumagaliyev and Centrus Energy’s senior vice-president Kevin Alldred during Zhumagaliyev’s official visit to the US.

Six countries interested in constructing nuclear plant in Kazakhstan

Kazakhstan has held consultations with leading companies that possess modern reactor technologies, including the companies Rosatom (Russia), Areva (France), Toshiba, Japan Atomic Power Company (JAPC), Mitsubishi, (Japan), CGNPC (China), KEPCO (South Korea), Westinghouse (US), and Hitachi-General Electric (Japan and the US).

During the meetings, the foreign companies provided information about new reactors with improved safety factors as well as about their experience in the construction and operation of nuclear power plants, and expressed interest in cooperating in the construction of the nuclear power plant in Kazakhstan.

The Energy Ministry noted that, to date, two areas have been selected for constructing the nuclear power plant: the town of Kurchatov in eastern Kazakhstan and the village of Ulken in the Almaty province.

The construction of the plant will take a minimum of twelve years; around two years are needed to complete the project’s feasibility study, with at least another ten years for the construction work itself.

Iran and China to join construction of Kazakhstan's oil refinery

The vice-governor of Mangistau Oblast, Rakymbek Amirzhanov, has confirmed that representatives of Iran and China have put both the countries forwards to take part in the construction of a fourth oil refinery.

Amirzhanov explained that Iran has expressed an interest in the project due to several factors: “In Iran, all the oil refineries are located in the north of the country. All the oil fields are located in the south. Iran spends about $35 per tonne of oil to transport crude from the south to the north of the country.” Kazakhstan, situated close to northern Iran, is therefore a good candidate for a new partnership in oil swaps.

The approximate minimum amount of investment in the construction of the project is estimated to be $6 billion. Chinese companies, however, are willing to enter the project with investments estimated at $5 billion.

Russian and Kazakh presidents ink document on Caspian Sea delimitation

The presidents of Russia and Kazakhstan, Vladimir Putin and Nursultan Nazarbayev, have inked a document regarding the delimitation of a part of the seabed of the Caspian Sea.

Putin and Nazarbayev signed a protocol on amendments to the existing protocol of the Russia-Kazakhstan agreement dated 6th July 1998 on the delimitation of the northern part of the Caspian Sea’s seabed for exercising sovereign rights for subsoil use.

Earlier, Russian presidential aide Yuri Ushakov told reporters that the document regulates the joint development of the ‘central’ oil-bearing structure.

Representatives of 50 Japanese companies accompany Prime Minister Abe on his visit to Tajikistan

Senior representatives of 50 Japanese companies are accompanying Prime Minister Shinzo Abe on his five-day tour of Mongolia and Central Asia.

Japan is ready to extend its presence in Central Asia in order to counter China’s growing clout in the region and to get access to natural resources. Abe said that, together with the business leaders accompanying him, he wants to dramatically bolster economic ties with the countries.

The delegation is visiting Mongolia, Turkmenistan, Tajikistan, Uzbekistan, Kyrgyzstan and Kazakhstan, before returning to Japan.

Iran to launch over 50 new oil projects

Iran says it plans to introduce over 50 new oil projects to international investors, in what will be a key section of the country's plans to boost oil production in a post-sanctions era.

Seyed Mehdi Hosseini, the head of Iran's Oil Contracts Restructuring Committee, has emphasised that the projects will comprise exploration and production jobs and will be introduced in two upcoming conferences in Tehran and London. The conference in Tehran will be held in November, with the London conference following in February 2016. Both events will provide an opportunity for Iran to present its new-format oil contracts to investors.

The Iran Petroleum Contract (IPC) will be a modified version of the traditional buy-back risk service contracts and have been specifically designed to increase the attractiveness of Iranian oil projects for foreign investors.

The IPC offers different stages of exploration, development and production to contractors as part of an integrated package.

Iran will also set up joint ventures with the contractors to extract reserves at the fields. The contractors will be reimbursed accordingly through a share of production from the fields.

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