Kazakh oil production in sharp decline due to blackout

Kazakhstan’s oil and condensate production has dropped by almost 13% to about 1.66 million barrels per day in less than 24 hours after a blackout in the western part of the country.

The power outage cut off one of the three refineries in Atyrau, operated by state oil and gas holding KazMunayGaz, curtailing production of other fuels by 23%, according to the Kazakh Energy Ministry. Natural gas output fell by 9%.

The blackout started early on Monday morning after a gas-fired train suddenly shutdown at a three-train regional power plant, known as Maek, near the Kazakh city of Aktau on the Caspian shore.

The train reportedly supplied about 130 megawatts of power to dozens of onshore oil and gas producing fields in the Mangistau and Atyrau provinces.

Caspian Pipeline

The blackout also affected transit through the Caspian Pipeline, which is responsible for about 1% of global oil supply.

The pipeline carries crude from three largest developments in Kazakhstan — Tengiz, Kashagan and Karachaganak — to an export terminal on the Russian Black Sea coast.

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Operator Caspian Pipeline Consortium had to disconnect and power down four pumping stations in western Kazakhstan on Monday to avoid damage from spikes and troughs in the electricity supply.

The pipeline resumed operations late on Monday, but the pumping stations were stopped again on Tuesday after more interruptions to the power supply.

However, the pipeline is accepting oil into the network at Tengiz and Atyrau at a “reduced rate” as their pumps are supplied with power from onsite generators.

“Due to the professionalism of the personnel, irreversible consequences and damage have been avoided for the transportation process and the equipment,” Caspian Pipeline Consortium said.

KazMunayGaz troubles

The power outage led to KazMunayGaz stopping thousands of producing wells at fields in the Mangistau region that are operated by its four regional subsidiaries, led by Ozenmunaygaz, on Monday.

KazMunayGaz said that throughout Tuesday morning its fields in the west of the country were receiving between 5% and 40% of the power they needed from Maek.

Meanwhile, Aktau-based news portal Inaktau quoted a Maek representative as saying that repairs at the first power train are scheduled to last for 48 hours until Thursday evening.

KazMunayGaz executive chairman Magzum Mirzagaliyev was already on an inspection visit to Atyrau on Tuesday morning as more than 6,000 wells remained idle at company’s fields in the Atyrau and Mangistau provinces.

Speaking in Astana earlier on Tuesday, Kazakh Energy Minister Almasadam Satkaliyev said that “the accident [at Maek power plant] is a consequence of long-term wear and tear of the [generating] equipment”.

The minister also suggested that rectifying the situation at Maek may “take a long time”.

Oleg Chervinsky, a publisher of Kazakh oil industry magazine Petroleum, said that while repairs may be completed soon, “there is no guarantee that the blackout will not occur soon again”.

KazMunayGaz’ officials have reported increasing damage sustained by its assets in the Atyrau and Mangistau regions over the past several years due to Maek’s regular outages.

“Talks on the construction of a new gas-fired power plant to support regional oil and gas operations have been ongoing for years, with a most recent announcement suggesting that the construction may start in 2025,” Chervinsky said.