Vitol plans liquefied petroleum gas foray in Kazakhstan - sources
* LPG project's investments seen at over $300 mln
* Annual production seen at 500,000 tonnes of propane and
* Consortium yet to respond to Vitol - sources
By Damir Khalmetov and Alla Afanasyeva
MOSCOW, Feb 11 (Reuters) - Vitol, the world's
top oil trader, plans to access liquefied petroleum gas (LPG)
from the giant Kashagan field in Kazakhstan and may finance the
construction of a processing and export facility, industry and
company sources told Reuters.
LPG is mainly a by-product of oil development at the field
and at the moment there is no infrastructure for refining,
storage and transportation of LPG from Kashagan.
The new facility, expected to be commissioned about two
years from now, will desulfurize liquid propane-butane mix
delivered by pipeline from Kashagan's Bolashak plant, fraction
it into propane (some 70-75 percent) and butane (some 25-30
percent) and tranship to railway tank cars.
Vitol, Kazakhstan's largest crude offtaker, is ready to
invest in the project - worth over $300 million - as soon as
this year to build a facility annually producing 500,000 tonnes
of propane and butane, according to Reuters sources.
The trader has approached North Caspian Operating Co (NCOC),
the field operator, and Kashagan's shareholders with a proposal
to build the LPG processing and export facility near Karabatan
railway station in the Atyraus region, but no immediate reaction
Vitol declined to comment, but Vitol sources confirmed the
trader's interest in the project.
The sources said that according to the Kazakh government's
schedule, the plant is set to be commissioned in 2021.
"NCOC has no comment on any commercial discussions that may
be ongoing at this time," the consortium said in a statement.
Kazakhstan's Energy Ministry provided no comment.
The new facility may help Vitol boost its presence in the
Kazakh LPG export sector. Vitol plans to deliver propane and
butane to the global market via Russia's Black Sea terminal in
Taman, where Vitol has a transhipment contract.
The proposed terms of cooperation between Vitol and
Kashagan's stakeholders were not immediately clear, sources
"Vitol wants to buy low-grade LPG, purify it and sell via
Taman," a source familiar with the matter said.
Kashagan, one of the biggest oil discoveries in recent
history, started commercial output in late 2016 after years of
delays and currently produces about 350,000 barrels of crude per
Natural gas output at Kashagan in 2018 reached 6.8 billion
cubic metres, Kazakh Energy Ministry data shows.
Kashagan operator NCOC includes Eni, Total
, Shell, ExxonMobil, Kazakh state firm
KazMunayGaz, China's CNPC and Japan's Inpex.
(Additional reporting by Gleb Gorodyankin; Writing by Vladimir
Soldatkin; Editing by Dale Hudson)
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