The Tengiz Field Expansion Project
The Tengiz Field Expansion Project is a giant reservoir that is located far below the steppes of western Kazakhstan. Here, the oil column is an impressive 1.6 kilometers or 1 mile in width.
It has a surface area that is four times as large as Paris, France. As such, it is currently ranked as one of the largest and deepest producing oil fields in the world.
This supergiant oil field is also the biggest single-trap producer. The Tengiz Field Expansion hopes to both build upon and capitalize on the available resources.
What Companies Are Involved In The Tengiz Field Expansion Project
With projects such as these, there are almost always multiple stakeholders at play. Foremost among these for this project, however, it is Chevron, which holds a 50 percent interest in the area overall by financing and benefiting from its 50 percent interest in Tengizchevroil or TCO.
TCO operates two fields in the area. The first of these is Tengiz and the second is the Korolev field. The current output of both fields together is capable of satisfying the oil demands of many nations.
Watch what Chevron’s Chairman and CEO John Watson had to say about what makes for a successful partnership. You can see more on Chevron at their website Chevron.
On average, these two fields produce around 257k barrels of crude oil. They also produce 21k barrels of natural gas in liquid state and a staggering amount of natural gas measuring 348 million cubic feet.
The goal of this expansion is to increase each of these numbers for daily production so that recovery from the two separate sources is maximized. Another major stakeholder is Exxon Mobile, which has a 25 percent share.
Where Is The Tengiz Field Expansion Project Located
The project is based in Kazakhstan and currently, the oil flow from the fields is routed through Russia. Marked as the sixth largest oil field in the world, this site produces resources that are sent through Novorossiysk via the Caspian Sea.
One proposed alternative is the route known as the Baku-Tbilisi-Ceyhan, however, this route is not the most economical option. The southern Iranian route could prove to be a more cost-effective solution.
What Is The Overall Magnitude Of This Expansion And How Much Oil Will It Produce?
Despite the remarkable numbers that are already maintained by the existing site and production plans, this expansion would result in a fairly significant increase in terms of how rapidly the available resources are sourced.
For instance, current increases have pushed the daily production of crude oil up to 500k barrels. The goal for post-expansion, however, is at 850k. This will more than triple the starting daily production, making the project well worth its cost.
Sour Gas Injection Technology
This will be accomplished via the sour gas injection technology that FGP introduced in 2008 when working on the previous expansion of TCO.
The oil extracted from this region tends to be quite high in sulfur, which has indeed led to a number of environmental concerns. When removed, it is hot and comes at an exceedingly high pressure.
This pressure combined with the associated heat is currently believed to be the very highest throughout the world, making extraction a bit more dangerous than it is at other locations.
Given the high amount of hydrogen sulfide and the related sulfur, there has long been a concern about explosion and fire, particularly after a 1985 explosion that was difficult for Soviet firefighters to get under control.
In fact, the well responsible for this explosion and the ensuing fire burned for an entire year before it was put to an end.
One important thing to note, however, is that extraction technologies and safety and preventative equipment have evolved considerably over the last 30 years, and thus, the expansion utilizes resources and methods that may have a greater ability to limit both environmental impact and the potential for safety hazards.
How Much Will The Project Cost Overall
The project was started in 2017. Although the initial estimate was a bit more modest, it is expected that the total costs of the expansion will reach or even exceed $36.8 billion.
It is expected that the first production of oil via the new additions will begin in 2022. The primary obstacle with this project, however, is the method and route for transporting the oil.
Existing production plants are geared at working at full capacity throughout the development so that no profits are lost and the present acquisition of resources is not slowed.
The Creation Of New Jobs
This project is expected to create more than 20,000 new jobs in the area within the oil industry. This is according to the ministry of labor and of social protection.
The project will also generate as much as $120 billion in additional taxes by 2033. This is when the contract for oilfield development will have reached its end.
By this time, more than 250 million tons of crude oil will have been extracted from the region which is a huge boost for Chevron considering the recent slump in oil and gas.