Saipem gets US$1.8 billion Kashagan gig

The North Caspian Operating Co. (NCOC) awarded Saipem a US$1.8 billion engineering and construction contract to build two pipelines for the Kashagan field project, offshore Kazakhstan.

Image from NCOC.

The Kashagan giant field extends over a surface area of approximately 75km by 45km and is located in the Kazakh waters of the Caspian Sea, about 80km southeast of Atyrau, in some 4200m of water.

Upon the terms of the agreement, Saipem will construct two 95km pipelines, which will connect D island in the Caspian Sea to the Karabatan onshore plant in Kazakhstan. Construction is expected to be complete by end of 2016.

Saipem’s scope of work includes engineering, welding materials, conversion and the preparation of vessels, dredging, installation, burial and the pre-commissioning of the two pipelines.

According to Saipem, each of the two pipelines have a 28 in. diameter and are made of carbon steel. They are internally cladded with a corrosion resistant alloy layer, and will each have an offshore length of about 65km out of the total 95km.

In November, NCOC partner Total said that production at the $50 billion project could resume as early as 2016 or 2017 at the latest, following the replacement of pipeline infrastructure.

The Kashagan field will be developed in two phases. Phase I, the experimental program, is already in the construction phase. Phase II is in the initial design phase and further phases are still under concept selection.

NCOC says that during Phase I, about half of the gas produced will be re-injected back into the reservoir. Separated liquid and raw gas will be taken by pipeline to the Bolashak onshore processing plant in Atyrau oblast, where export quality oil will be produced.  Some of the processed gas will be sent back offshore for use in power generation while some will be used to generate power at the process plant itself.

Kashagan’s reserves are estimated at some 35 billion bbl and 52Tcf of gas.

The NCOC consortium operates the Kashagan field, and is comprised of Italy’s Eni, ExxonMobil, Shell, France's Total, and Kazakh state oil company KazMunayGas, each with 16.8%, along with Japan's Inpex (7.6%) and China National Petroleum Corp. (8.3%).

Read more:

Total: Kashagan production to resume by 2017

Kashagan production remains frozen

Kashagan woes lead to shake-up

New gas leak arrests Kashagan

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