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Kazakhstan|business|April 24, 2014 / 11:22 AM
Kashagan's pipelines need to be replaced - NCOC

AKIPRESS.COM - kashagan The NCOC, developing Kazakhstan’s major Kashagan oil field, has confirmed that oil and gas pipelines need to be replaced, NCOC deputy chairman Zhakyp Marabayev said on Wednesday, Kazakh media report.

Replacing the two 88.5-km long pipelines will add to the costs of the project which is already years behind schedule and billions of dollars over budget. It will also weigh on the consortium’s partners, which include major oil companies Eni, Total, Royal Dutch, and Exxon Mobil. The companies need the oil to start flowing before they can start to recoup some of the $50 billion already spent on Kashagan over the past 17 years, said Wall Street Journal.

The latest delay is also a blow to the Kazakh Government, which had based its economic forecasts on revenue from the giant Caspian Sea oil field. Output at Kashagan was expected to ramp up to 370,000 barrels a day by 2015 from 180,000 barrels a day initially.

A final report on why Kashagan’s gas pipeline began leaking late last year, only weeks after the project first started, is due in June, after which the consortium will decide how the pipes should be replaced, Marabayev said.

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