Page 13 - AsianOil Week 49 2022

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terminal at Novorossiysk on the Black Sea. The scenario could enable Kazakhstan to Nippon Oil & Gas Exploration Corp. on a
Hence, Beijing's attempts to monopolise meet domestic consumption demands in joint proposal to monetize gas potential in
Kazakh energy exports have yielded poor eastern and northern provinces that lack the the Bujang, Inas, Guling, Sepat, and Tujoh
results. necessary infrastructure for deliveries, such (BIGST) fields located off the shores of
China's share in Kazakh oil production as pipelines. peninsular Malaysia.
has halved from 31% to 16%, while Chinese The proposed gas union envisages The BIGST fields are located off Kerteh,
investment in Kazakh oil and gas has also Russia, Kazakhstan and Uzbekistan forming Terengganu in eastern Malaysia, Petronas
slowed. It declined from $3.7bn in 2013 to a unique hub with an enhanced energy said.
$1.3bn in 2021. Moreover, of the 61.2mn partnership. Historically, since Soviet times Carbon capture and storage (CCS)
tonnes of oil drilled in Kazakhstan in 2020, the three countries have been linked by technology will be key to monetizing the
only 10.5mn tonnes came from China- a common gas transport system with a fields as they contain high carbon dioxide,
owned companies in Kazakhstan. transfer capacity of 40-50 bcm/year. Petronas said, adding that it will be the first
A decline in Kazakhstan's natural gas The gas transport system is still CCS project in Peninsular Malaysia.
exports to China is not unheard of. In operational and could be used for swap "The BIGST cluster will also be the
2020, the first year in which the COVID-19 operations and the re-exporting of gas to catalyst that is expected to spur the
pandemic caused lockdowns across the third countries. Nevertheless, Kazakhstan development of other high contaminant
globe, China's gas demand fell by 17%. and Uzbekistan are in no rush to join such fields in Peninsular Malaysia, which was
Beijing asked Central Asian partners to a union with Russia amid the growing not possible prior to this, due to the lack of
decrease China-bound gas flows. Although Western economic backlash against their complete CO2 handling infrastructure," the
demand sharply increased shortly after big neighbour to the north based on company said in a statement.
COVID-19 restrictions were lifted, new swingeing sanctions. This week Uzbekistan
geopolitical and economic realities then poured cold water on the idea of going as
intervened to put a dampener on any far as a gas union, saying it would prefer Wah Seong wins $127mn FPSO
optimism regarding additional Kazakh gas instead to stick to individual, unlinked
volumes available for export. commercial contracts on gas supply . topside module order
At Kazakhstan's end, a big change is the Rising domestic energy consumption is
conversion of major electricity-generating also a severe challenge for Uzbekistan. It Wah Seong Corporation's Singapore-based
plants in the country’s economic capital, lately entirely stopped exporting natural gas subsidiary, WS Engineering & Fabrication
Almaty, from running on coal to being and looked to increase gas imports amid Pte. has won a contract to build FPSO
powered by gas, with the objective of renewed difficulties with power outages topside modules from Malaysian FPSO
cutting polluting emissions by 80%. The across the country. supplier Yinson.
announcement of the shift was made in Kazakhstan’s overall gas exports to The contract is worth around $127
August this year amid reports of a potential China in 2022 look set to be around only million.
gas deficit in the country. 4mn cubic metres of a planned 75mn cubic According to Wah Seong, the scope of
Some experts have argued that starting metres. That would be the lowest such work of the contract involves engineering,
from 2024, Kazakhstan may face sharp export volume in 10 years. procurement, and construction of "certain"
depletions of available gas and fuel in China will suffer from the decrease FPSO topside modules.
light of growing domestic consumption, in natural gas exports from Kazakhstan. The work and services under the contract
and that therefore measures to evade that But the Kazakhs won’t find a way to are expected to be completed within 24
eventuality must be taken. This could mean substantially up gas exports while at months. Wah Seong did not say for which
Kazakhstan not proceeding with gas exports the same time meeting domestic energy FPSO project exactly the modules would be
from 2023. Notwithstanding, China has demand without exploring and developing built.
sought assurances that Astana will stick new gas fields and speeding up the building The contract was awarded by Yinson's
to gas exports in 2023, considering the of additional gas processing plants. On the subsidiary, Yinson Azalea, the same
vast Chinese domestic consumption. But other hand, if the gas union survives the company that earlier this week entered into
additional Kazakh energy exports to China initial scepticism and goes operational, an agreement for preliminary activities with
seem unlikely. China could find an answer in importing Eni Angola for the provision of a floating,
As things stand, the only viable option additional Russian gas perhaps combined production, storage, and offloading vessel in
for Kazakhstan to boost energy export with more Kazakh and Uzbek gas. Angola.
is a gasification of the country’s eastern Fuad Shahbazov is an independent Subject to the firm contract award, the
and northern provinces using Russian gas policy analyst focusing on regional FPSO would be deployed for the Agogo
deliveries and, in tandem, a re-routing of security issues in the South Caucasus and a Integrated West Hub Development Project,
Kazakh gas resources for export. In this Chevening FCDO scholar at the University located in the West Hub part of Block 15/06
vein, President Tokayev met with Vladimir of Durham School of Government and in Angola.
Putin on November 28 in Moscow. The two International Affairs (SGIA) . He tweets at Yinson said on December 5 that the
presidents discussed a tripartite “gas union” @fuadshahbazov. agreement for preliminary activities would
proposed by Putin that would coordinate last for 60 days and be worth about $218
deliveries of Russian gas to Kazakhstan million all together.
and Uzbekistan and possibly across all of Petronas, JX Nippon reach
Central Asia.
Given that Russia is seeking a stronger deal for BIGST offshore fields in
presence in the Asian energy market in
response to Western plans to push Russian Malaysia
deliveries out of the European energy
market, Kazakhstan could become the main Malaysia's state energy firm Petronas said
transit hub for Russian gas flows to China. on December 12 it would work with JX

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