For the second time since it produced first oil a month ago, a gas leak has sidelined Kashagan’s operations.
The North Caspian Operating Company (NCOC) said that the leak was found on a pipeline running from the artificial D Island to the onshore Bolashak processing plant in Atyrau.
Kashagan, estimated to house 16 billion bbls, has weathered a number of setbacks since its 2000 discovery. Hailed as the largest oil discovery in decades, production kicked-off on September 11 after a ten-year delay and multiple consortium changes. Six days later, a gas leak was detected, and operations came to an abrupt halt.
This scenario threatens the NCOC’s contractual obligations to launch commercial output of 75,000 b/d this month or the multi-national consortium behind the oilfield’s development faces fines under its production-sharing agreement with Kazakhstan.
In July, Kazakhstan exercised its pre-emptive rights to buy an 8.4% stake from ConocoPhillips in the field, also for around $5 billion. Following that deal, the state-owned China National Petroleum Corp (CNPC) acquired an 8.33% stake in Kashagan on September 7, reportedly beating out India’s Oil and Natural Gas Corporation in the process. The CNPC deal is also estimated around $5 billion.
Offshore the Caspian Sea, the total Kashagan Contract area covers more than 2,125 square miles of northern Caspian Sea waters and contains five separate fields -- Kashgan, Kalamkas A, Kashagan Southwest, Aktote and Kairan.
KazMunaiGas; Italy's ENI; ExxonMobil, Royal Dutch Shell and France's Total are partners in consortium with each holding 16.81% stakes in Kashagan. Japan's Inpex owns 7.56%. Eni is the operator.