Kazakhstan could delay JV with Gazprom over crisis

ASTANA, February 23 (RIA Novosti) - The global financial crisis could prompt Kazakhstan to suspend a joint venture with Russia's Gazprom to process Central Asian natural gas, the country's energy minister said on Monday.

Under a 2007 deal, the two ex-Soviet states are to create a joint venture in Russia's Urals city of Orenburg to process gas from nearby fields in Kazakhstan, mainly from the giant Karachaganak field. Output is largely to be supplied back to Kazakhstan and a minor part exported.

"We need to clarify the third phase of the development of the Karachaganak deposit and accordingly the establishment of the JV based on the Orenburg gas processing plant," Sauat Mynbayev said speaking in parliament.

"BG [British Gas Group] and AGIP [now Italy's Eni] - the partner companies in the Karachaganak project - have requested a delay in the third phase due to the current crisis," the energy and natural resources minister said, adding the decision would be made in the second half of 2009.

Karachaganak is the world's largest field with reserves estimated at over 1.2 billion metric tons of oil and condensate and 1.35 trillion cu m of gas.

The field is run under a 40-year production sharing agreement signed in 1997 by a consortium of firms comprising BG and Eni, which have 32.5% each, Chevron with 20% and Russia's LUKoil, which holds 15%.

This year, the Orenburg plant is to receive 9 billion cu m of gas from the field, according to the deal. In 2007 and 2008, Kazakhstan supplied 7.4 and 8 billion cu m respectively. Supplies are to grow to 10 billion cu m by 2012.

The joint venture is eventually to ensure supplies of 16-17 billion cu m a year, enough to use the processing plant's capacity in full until 2030 and preserve jobs at the facility. Production at the Orenburg gas deposit, the main source for the plant, has been falling since 1997.