Kazakhstan won't compensate replacement of pipelines on Kashagan

ATYRAU. KAZINFORM - Kazakhstan will not compensate the costs of replacement of the cracked pipelines from Kashagan field.      

"The costs incurred by the contractor of the North Caspian project for the repair of 28 inch pipelines are non-reimbursable, which is stipulated by the Settlement Agreement as of 2014. There is also an arrangement between shareholders and the Kazakhstan party to classify the costs for initial pipelines and their installation as non-reimbursable as per the Production Sharing Agreement", the press service of the RoK Energy Ministry told.

Production of Kashagan oil started in autumn 2013, but was suspended due to cracks in the pipelines partially routed on the sea bottom and overland from the artificial island "D" to Bolashak oil and gas treatment unit. It was decided to completely replace almost 200 km pipelines.

Reportedly, the estimated cost of the replacement scope was more than USD 2 billion. Oil production was resumed after replacement of the pipelines in September 2016. In January 2017 NCOC b.v. informed of production and export of the first million tons of offshore oil.