Caspian Overview: Azerbaijan and Kazakhstan in Focus
Azerbaijan's gas exports increased in January while production fell by 10.5%. It exported 885.5mn m3 of gas in January, which indicates a 4.9% increase year-on-year, the Azerbaijan state customs committee reported. However, the country's total commercial gas production fell by 10.5%, owing to declining production at both BP and Socar-operated fields.
Socar produced 543.1mn m³ of gas this January, compared with 570.2mn m³ in January 2015.
A source in Socar told NGE that during the first month of 2016, Azerbaijan extracted 2.546bn m3 of natural gas, 2.2% more than January 2015, but the commercial gas production was down by 10.5% to 1.6bn m3. The figure was 1.759 bn m3 in January 2015.
The source said that the decline occurred due to stopping gas production by 30mn m³ in January when a well caught fire, from late 2015 until February 10.
Oil and gas wells of the Azerbaijani offshore field Gunashli will be repaired and put into operation by late 2016.
He added that during 2015, BP delivered 3.1bn m3 of associated gas to Socar from Azeri-Chirag-Guneshli fields, but the figure is projected to decrease to 2.05 bn m3 this year owing to more gas for re-injection to maintain crude production.
Earlier Baku requested Russian giant Gazprom to supply the country with 3-4bn m³/yr of natural gas.
So Azerbaijan is facing challenge in domestic gas markets, while it has obligations to increase gas deliveries to Turkey and Georgia.
During the week, Iran and Azerbaijan also have agreed in principle to develop jointly a disputed oil field in the Caspian Sea, which Baku calls Araz-Alov-Sharg and Tehran calls Alborz, but they have not agreed the details.
Across the Caspian, Kazakhstan announced that it would export less gas this year as production is forecast to dip.
Last year, the central Asian republic produced 45.3bn m³ of natural gas, about 5% more than the previous year. However, this year it plans to produce only 43.5bn m³. Last year, exports reached 12.4bn m³, up 4% on 2014, and they are expected to be down to 11.6bn m³ this year.
Kazakhstan's oil ministry also said that installing a new gas compressor on the third branch of central Asia-China pipeline, which was inaugurated last year, was on the agenda to increase the total capacity of the three lines to 55bn m³/yr.
Kazakhstan is also looking for a new partner for the second phase of construction of an integrated gas-chemical complex in the country’s Atyrau province, with worth $4.1bn, after South Korea’s LG Chem quit the project, the report said.