About North Caspian Project
The North Caspian Project is the first major offshore oil and gas development in Kazakhstan. It covers three fields: Kashagan, Kairan and Aktoty.
The giant Kashagan field ranks as one of the largest oil discoveries of the past four decades, with approximately 9-13 billion barrels (1-2 billion tonnes) of recoverable oil. The Kashagan reservoir lies 80km offshore from the city of Atyrau in 3-4 meters of water, and is more than 4km deep (4,200 meters).
In 2016, the first offshore oil in the history of Kazakhstan was commercially produced from Kashagan. The Operator of the project, North Caspian Operating Company N.V. (NCOC), completed a major pipeline replacement project ahead of schedule and on September 28 re-opened the first wells offshore.
The President of Kazakhstan, Nursultan Nazarbayev, honoured the project workers and veterans with a personal visit to Atyrau on December 7, 2016.
The first million tonnes was exported in the first days of 2017, and NCOC safely reached actual production levels of over 200,000 barrels per day in mid-2017.Given its scale and technical complexity, the North Caspian project will be developed in phases. The estimated cost of Kashagan Phase 1, which began commercial production in 2016, is about US$55 billion.
Project Milestones
In 2017, NCOC and its shareholders marked the 20th anniversary of the signing of the North Caspian Sea Production Sharing Agreement (NCSPSA).
On November 18, 1997, in Washington DC, the Republic of Kazakhstan and a consortium of the world's leading oil and gas companies agreed on a legal framework that launched the largest foreign direct investment project in the history of the newly-independent country. The NCSPSA built on an earlier agreement in December 1993 to conduct one of the largest 2D seismic surveys ever undertaken in the industry. This historical milestone falls on the Company's 1 Year of Commercial Production marked in November 2017.
In 2018, the Consortium saw the celebration of the 25th anniversary of the North Caspian Project commemorating the establishment of an international consortium KazakhstanCaspiShelf in December 1993 and the commencement of seismic works on the Caspian Sea.
The North Caspian Project Milestones. Project Challenges
The combined safety, engineering and logistics challenges in a harsh offshore environment make Kashagan Phase 1 one of the largest and most complex industrial projects currently being developed anywhere in the world.
Development of the Kashagan field represents a unique combination of technical complexity and supply-chain coordination in a harsh offshore environment where temperatures can drop below -30ºC in winter and rise to +40ºC in summer
Because of its low salinity due to the inflow of fresh water from the Volga River, shallow waters of only three to four metres, and subarctic temperatures, this part of the Caspian freezes for nearly five months a year. Drifting ice and ice scouring on the seabed put heavy restraints on construction, production and logistics, calling for innovative technical solutions.
The Kashagan reservoir is located some 4,200 metres below the seabed and is
highly pressurized. The light crude oil from the Kashagan field has a high sour gas content (H2S) and carbon dioxide (Co2). The particular challenge of Kashagan is posed by the harsh operating environment, which requires many more precautions and a much larger investment to manage the safety risks.
Located at the confluence of the Ural and Volga rivers, the North Caspian Sea and its environment are characterised by rich and diverse flora and fauna with 60% of the species unique to the Caspian Sea. While the sturgeon is often considered the most commercially valuable species, the Caspian Sea is also home to seals, and its coastal wetlands attract a variety of birds, including many of those listed in the Red Book of Kazakhstan. The Caspian Sea is also a major migration route for birds flying from Asia to Siberia. Preserving this sensitive environment in the northern part of the Caspian Sea and minimising impacts on the environment are key challenges in developing oil and gas fields in this area.