The Chevron-led Tengizchevroil oil producing consortium in Kazakhstan has set a new target for the start-up of its multi-billion dollar production expansion project at Tengiz, the country’s largest onshore oilfield.
According to the Kazkah Energy Ministry, Tengizchevroil said the scheme's Wellhead Pressure Management project is expected to become operational before the end of March 2023, with the Future Growth Project facilities set to be up and running by November 2023.
The ministry has acknowledged that the schedule has slipped by between three and seven months, but the delays are seen as moderate considering the feared impact when about 13,000 builders were withdrawn from the construction site last year in order to combat the spread of Covid-19.
Contractors may have completely overcome Covid-19-induced delays, considering that Chevron in October 2019 was anticipating a year-long setback in the start-up of the capacity expansion facilities after acknowledging expansion cost overruns of between $4 billion and $5 billion.
According to the ministry, the operator now expects the total cost of the expansion to remain at the adjusted amount of $45.2 billion, despite additional expenses in handling deliveries and managing the workforce last year.
The ministry added that, as of 1 June, total spending on the expansion project had already topped $35.7 billion.
Earlier this month, Tengizchevroil said the expansion project had reached the 82% overall completion mark, with all planned 86 pre-assembled modules delivered to the field and installed on their foundations.
In 2016, Tengizchevroil shareholders approved the project to drill new wells and install facilities to process and reinject sour gas to manage the underground pressure to arrest the natural output decline in the Tengiz reservoirs.
The plan is to not only reverse the decline in production at Tengiz but increase it by 260,000 barrels per day to a total 850,000 bpd.
Tengizchevroil reported a 12% drop in production to about 550,000 bpd between January and April this year against the similar period of 2020.
Besides Chevron with a 50% interest, Tengizchevroil partners are US ExxonMobil with a 25% stake, Kazakh state oil and gas holding KazMunaiGaz with 20% and Russia’s Lukoil with 5%.
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