Kazakhstan scraps plan for Karachaganak gas processing plant with foreign shareholders
Kazakhstan's energy ministry said on Wednesday it had terminated plans to build a gas processing plant at the Karachaganak field with the project's mainly foreign shareholders. It said, without elaborating, that it sought to engage domestic companies.
The central Asian country has clashed for years with international oil companies over costs, bringing multibillion-dollar claims against them in 2023.
The companies say the government is simply seeking to increase its shares in key oil and gas projects in what amounts to "resource nationalism".
Kazakhstan's authorities have rejected such criticism, saying their aim was to rein in costs inflated by Western majors.
The field is operated by the Karachaganak Petroleum Operating (KPO) consortium, which includes Eni (29.25%), Shell (29.25%), Chevron (18%), Lukoil (13.5%) and KazMunayGaz (10%).
The shareholders and the local government agreed last year to build a gas processing plant with annual capacity of up to 4 billion cubic metres and to start operations there in 2028.
Currently, raw gas from Karachaganak is delivered across the border to Russia's Orenburg processing plant.
The ministry did not state the reason for halting the Karachaganak processing plant project.
Several industry sources linked it to legal disputes between the government and the foreign companies.
The energy ministry told Reuters in an emailed reply to questions that the arbitration case involving the Karachaganak shareholders was "confidential".
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