North Caspian Operating Company (NCOC), operator of the Kashagan field, has agreed to partner Kazakhstan's state-run gas transmission operator Kaztransgaz in researching options for transporting and processing of gas produced from the Caspian Sea.

The project partners will consider proposed solutions following completion of front-end engineering design studies on planned offshore and onshore gas pipelines and an onshore gas processing plant.

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These studies are expected to become available between 2022 and 2023 and will enable the partners to reach a final investment decision on the first phase of a plan to expand production, according to Kaztransgaz.

The project calls for development wells to be drill into an untapped section of the Kashagan reservoir, with production from expected to begin in 2027 and add up to 50,000 barrels per day of oil production

Concurrently with oil, NCOC will also produce an additional volume of sour gas at an anticipated average rate of 4.2 million cubic metres per day, according to an NCOC presentation on Kashagan future development options.

Most of that gas will be sent to shore via a proposed pipeline link and onward to a processing plant with an annual processing capacity of 2 billion cubic metres of gas.

This plant will become the second facility to be built onshore to remove off-spec hydrocarbons, sulphur and hydrogen sulphide from Kashagan's incoming gas mixture before volumes can be sent further into the Kazakhstan's trunkline network.

Earlier this year, Kazakh contractor GPC Investment started construction of the first facility.

The $1.1 billion plant aims to take 1.1 Bcm of sour gas annually from Kashagan and supply about 815 million cubic metres per annum of dried gas to the trunkline network.

The first plant will also deliver an estimated 119,000 tonnes per annum of liquid petroleum gas to the local and export markets, as LPG is gaining popularity as a cleaner and more affordable motor fuel in former Soviet Union countries and Eastern Europe.

GPC Investment, which was incorporated in 2019 and about which little was known, told a local newspaper in the Kazakh oil city of Atyrau that its founder and sole shareholder is a Kazakh national, Abay Amirkhanov.

The plant under construction and the second proposed processing facility are also aimed at reducing reinjection of produced sour gas back into the Kashagan reservoir.