* Giant project has cost estimated $55 bln so far
* Missed oil price peak due to technical problems
* Analyst expects quick initial ramp up
* Further expansion only likely to begin in 2020s
(Adds analyst comment)
By Raushan Nurshayeva
ASTANA, Oct 14 The first batches of oil from
Kazakhstan's giant offshore Kashagan field were exported on
Friday via two pipelines, the Energy Ministry said, confirming
the $55 billion project was moving ahead as planned.
Energy firms developing the field in the central Asian
country have shipped 7,700 tonnes of oil through the private CPC
pipeline and 18,800 tonnes through a pipeline operated by
state-controlled firm KazTransOil, it said in a statement.
The ministry said start-up work and testing was continuing
at the field and getting it into "stable operations mode will
take some time". Kashagan has also shipped 22.8 million cubic
metres of gas into the state-run gas pipeline system, it said.
Energy Minister Kanat Bozumbayev said on Wednesday four
wells were producing a total of 90,000 barrels per day (bpd),
although it was unclear how much was oil and how much was gas to
be shipped separately, flared or reinjected into the reservoir.
The field off Kazakhstan's Caspian coast has cost about $55
billion to develop, according to Wood Mackenzie. It first
started production in 2013 but output was suspended shortly
afterwards because of technical problems with the gas pipelines.
The NCOC consortium developing Kashagan is made up of China
National Petroleum Corp, Exxon Mobil, Eni
, Royal Dutch Shell, Total, Inpex
Kashagan was initially expected to produce 75,000 barrels
per day (bpd) in October, rising to between 150,000 bpd and
180,000 bpd in November and December.
Ashley Sherman, senior Russia and Caspian analyst at Wood
Mackenzie, said the next milestones for Kashagan would be
reaching stabilised output at 75,000 bpd and then ramping it up
to 100,000 bpd or more by the end of the year.
The third milestone and a key determinant of the project's
longer-term success will be the reinjection of sour gas into the
reservoir, which is due to start six months after its launch.
Wood Mackenzie expects a fast increase in output at Kashagan
phase one - the first stage of the project which is due to be
completed by the end of 2017 - with annual production averaging
more than 150,000 bpd in 2017 and 230,000 bpd in 2018.
But Wood Mackenzie said further expansion may take longer,
even though Kazakhstan, hard hit by a fall in oil revenues due
to lower prices and facing output stagnation at many other
fields, wants to implement it as quickly as possible.
"You need a phase two for Kashagan to realise its full
potential," Sherman said.
"(But) the decision making process on phase two is unlikely
to intensify until the end of the decade when the oil price
recovers and there is data from phase one to justify expansion."
(Writing by Olzhas Auyezov; editing by David Clarke)