(Adds details, background)
By Olesya Astakhova
MOSCOW May 15 The consortium developing the
giant Kashagan oilfield will have to replace the entire pipeline
system at the deposit, Kazakhstan's oil minister said on
Thursday, confirming that output there would not resume this
Asked by Reuters if the consortium developing the Caspian
Sea oilfield was planning to replace all its pipelines, Oil &
Gas Minister Uzakbai Karabalin replied: "Yes, we do plan to do
Referring to delayed output at Kashagan, he said Kazakhstan
had been forced to lower its 2014 oil output forecast to 81.7
million tonnes from 83 million.
Production at Kashagan, the world's biggest oil find in 35
years, started last September but was halted in early October
after the discovery of gas leaks in the $50 billion project's
The North Caspian Operating Company (NCOC) developing
Kashagan said last month that it did not expect to produce oil
this year due to the leaks.
NCOC includes Eni, Exxon Mobil, Royal Dutch
Shell, Total, China's CNPC,
Japan's Inpex and Kazakh state-run company KazMunaiGas
Citing the results of an investigation, NCOC also did not
rule out that oil and gas pipelines might have to fully
replaced, a possibility raised by Reuters in April.
Kazakhstan is the second-largest post-Soviet oil producer
after Russia. The government had originally hoped that Kashagan
would produce 8 million tonnes of crude in 2014.
The field's oil is 4,200 metres (4,590 yards) below the
seabed at very high pressure, and associated gas reaching the
surface is mixed with some of the highest concentrations of
toxic, metal-eating hydrogen sulphide (H2S) ever encountered.
NCOC has identified stress cracking due to sulphur-laden
gases as "the root cause of the pipeline issues" at Kashagan.
Much of Kashagan is built on artificial islands to avoid
damage from pack ice in the Caspian, which freezes for five
months a year in temperatures that drop below minus 30 Celsius
(Reporting by Olesya Astakhova; Writing by Dmitry Solovyov;
editing by Jason Neely)