Under the terms of the agreement, from 2012, the Karachaganak Petroleum Operating (KPO) consortium will deliver approximately 16 billion cubic meters of raw gas to the Orenburg plant in Russia, where it will be refined.
The KPO consortium is comprised of Italian utility Eni and UK gas company BG Group, which are co-operators with 32.5% each; as well as US oil firm ChevronTexaco, which holds 20% and Russian oil company Lukoil, which holds 15%. The consortium is currently producing 385,000 barrels of oil equivalent per day.
BG Group said that the agreement, which is subject to approvals, sets out the commercial terms governing the sale of gas over a 15-year period, beginning during Q4 2007. The capacity will increase to 16 billion cubic meters of raw gas after the $8 billion Karachaganak phase III expansion, which is expected onstream in 2012.
In a press release, Eni said that the gas sale agreement represents a further step towards the development of the Karachaganak field, creating the conditions for the start-up of phase III of the project, which will deliver reserves in excess of two billion barrels of oil equivalent of new oil and gas.
Mark Carne, BG Group executive vice president for Europe and central Asia, said: This agreement is a significant milestone in the continued development of the giant Karachaganak field in Kazakhstan and represents the commercialization of over seven trillion cubic feet of gas.
Karachaganak, located in north-west Kazakhstan, is one of the largest oil and gas condensate fields in the world, with reserves of over five billion barrels of oil equivalent.
