Chinese enterprises are interested in participating in the construction of a new gas processing plant (GPP) at the Karachaganak oil and gas field, one of Kazakhstan's three major hydrocarbon fields.
Kazakhstan has identified the participants for the new gas processing plant (GPP) project at the Karachaganak field, which aims to supply commercial natural gas to the domestic market. The national gas company QazaqGaz will serve as the sole operator of the project, while China CITIC Construction has expressed willingness to participate.
The proposed gas processing plant will have an annual capacity of up to 4 billion cubic meters and was initially scheduled to come online in 2028. Originally, the construction was planned to be carried out by Shell and Eni, both of which had participated in the development of the Karachaganak field in western Kazakhstan. However, due to severe cost overruns and disagreements over implementation terms, Kazakhstan withdrew from the project in March 2026.
Currently, natural gas from the Karachaganak field is processed at a Russian facility in Orenburg. Kazakhstan plans to relocate this processing activity within its own borders to strengthen energy security and reduce dependence on external infrastructure—especially given periodic disruptions to energy supplies caused by drone attacks.
Under current plans, the future plant’s capacity could be expanded to 5 billion cubic meters per year. This project is a key component of Kazakhstan’s comprehensive gas industry development plan through 2029, directed by President Kassym-Jomart Tokayev.
Energy Minister Yerlan Akhmedzhanov confirmed that selecting QazaqGaz as the sole operator was driven by the need to accelerate the project’s implementation phase and the company’s extensive experience in managing natural gas infrastructure.
The economic viability of the project has been confirmed, and a framework agreement outlining basic cooperation principles has already been signed with CITIC Construction. Preparations for the front-end engineering design (FEED) phase are currently underway, while issues related to land allocation, infrastructure, and raw material supply are also being addressed.
All parties are closely monitoring negotiations with foreign shareholders of the Karachaganak project. Key issues include securing gas supply, establishing a pricing mechanism ensuring market feasibility, integrating the new plant with existing oilfield infrastructure (a brownfield project), and resolving gas transportation fee mechanisms.
"For Kazakhstan, this factory is critical—delaying the project indefinitely is unacceptable. The country needs to see results. The project must move forward dynamically and strictly in line with national economic interests," said Akhmedzhanov.
The project comes amid ongoing legal disputes between Kazakhstan and international energy companies.
As previously reported by Central Asia Today, Shell and Eni Group may ultimately be required to pay compensation ranging from $2 billion to $4 billion to the Kazakh government following international arbitration proceedings in London.
Additionally, another major project—the Kashagan oil field—faces similar disputes, which are currently under review at the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C.
Source: Central Asia Today
Author: Dmitry Pokidayev
Original article: toutiao.com/article/1862467481591820/
Disclaimer: The views expressed in this article are those of the author alone.