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Astana, Kazakhstan • 27 December 2023

Kazakhstan to Commission 14 GW Power Capacity in Next Five Years

The government reported on the development of the national power grid in 2023

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primeminister.kz
primeminister.kz

The government prepared a report on the development of the national power grid for the next few years, outlining plans to commission new capacity generating 14 GW, the launch of new gas fields, and implementation of renewable energy projects, QazMonitor reports citing primeminister.kz.

Oil and gas

In January-November 2023, oil and gas condensate production totaled 82.2 million tons, indicating an 8% period-over-period increase. Gas production reached 53.8 billion cubic meters, showing a 12% growth over the same period, with 26.9 billion cubic meters of marketable gas produced (a 6% increase). Of these volumes, 64.3 million tons of oil (10% up) and 5.3 billion cubic meters of natural gas (8% up) were exported.

In January-October 2023, domestic refineries produced 11.2 million tons of petroleum products, exceeding target expectations and reaching 101.5% of planned production. By the end of the year, production is expected to reach 13.4 million tons of petroleum products.

Furthermore, the Rozhkovskoye field has commenced commercial operations in the West Kazakhstan region, with an estimated production of 14.2 billion cubic meters of raw gas and 7.1 million tons of condensate until 2040. Additionally, the Aksai Yuzhny field was commissioned in May of this year, and the East Urikhtau field was commissioned in early December. Several more gas projects are expected to be launched in the medium term, including Central Urikhtau (Aktobe region), Prorva West (Atyrau region), and Kalamkas (Mangystau region).

The authorities approved the Comprehensive Plan for the Development of Major Oil and Gas and Petrochemical Projects. Furthermore, nineteen subsoil plots, which had been held by subsoil users for a long time without fulfilling contractual obligations, were returned to state ownership.

New contracts

The government concluded five subsoil use contracts worth $9 billion. The agreements were reached under the Improved Model Contract mechanism, which provides incentives for the exploration and production of complex projects.

Additionally, the authorities also signed several agreements with foreign investors to implement new large-scale renewable energy projects. These include the construction of three wind power farms with a total capacity of 3 GW, with the participation of the government of the UAE, and multinational petroleum companies Total Energies and China Power International Holding.

Kazakhstan has also entered the uranium market, signing the first-ever natural uranium supply contract with an energy company from the UAE, as well as a long-term supply contract with an energy company from China.

Modernization of the national power grid

In 2023, the government allocated ₸146.5 billion, including ₸19 billion of private investment, for the construction and modernization of the national power grid. In total, eight power units, 43 boilers, and 40 turbines have been repaired throughout the country. The authorities also built five 220 kV power lines spanning about 780 km to double the reliability of the Western Kazakhstan regional power grid.

primeminister.kz
primeminister.kz

Since July 1, Kazakhstan has introduced a mechanism for the centralized purchase and sale of electricity by a single buyer in real-time. This is expected to eliminate speculative operations in the purchase and sale of electricity in the domestic market, reduce the number of unproductive intermediaries, and minimize deviations in electricity flows at the border with neighboring power grids.

Furthermore, the annual investment limit was raised from ₸32 billion to ₸428 billion, expanding the pool of energy projects for the modernization, reconstruction, expansion, and renewal of the main equipment.

Additionally, a five-year schedule of auction bidding for the construction of renewable energy facilities with a total capacity of 6.7 GW until 2027 was approved, enabling the attraction of investments into the industry. As of now, a total of 16 renewable energy facilities with a combined capacity of 495.6 MW have been commissioned, totaling $450 million.

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