Victoria Panfilova, columnist of Nezavisimaya Gazeta, specially for Vestnik Kavkaza
Kazakhstan will develop projects for the extraction of shale gas, Prime Minister Karim Masimov claimed at the International Conference on Energy Charter. "We believe that the production of energy in our country will continue to grow in the upcoming years. We hope to be among the ten major energy producers, including the area of production of natural gas. We are also going to develop projects for the development of shale gas," Masimov said.
He explained that the production and sale of energy allowed Kazakhstan to overcome the challenges the republic faced after the collapse of the Soviet Union, as well as to become one of the most powerful economically stable countries. According to Masimov, the role of government is not only to provide significant achievements, but also to "use all the resources that we have."
Shale gas is a natural gas consisting mainly of methane. It is mined from deposits located in shale sedimentary rocks of the crust. The technology in the extraction of shale gas is more complicated than in conventional gas production. According to experts, it is necessary to have a well-developed chemical industry and special equipment for the extraction of shale gas. These ambitious plans fit into the strategy of innovative development of the country declared by Kazakhstan.
"The revolution in shale gas production is a major key innovation of modern energetics. This is a promising and, the most important, the innovative direction of the hydrocarbon sector development, recognized throughout the world today. In this respect Masimov’s voiced plans can only be approved. If Kazakhstan is able to implement them , it will bypass Russia. We only speak now about shale gas production, but appropriate technologies are yet to come (and no less important reserves of conventional gas, for example, on the Arctic shelf are not mastered yet- also due to the lack of technology). it is possible if Kazakhstan commits the breach, it is for Russia will be an additional incentive and example for the development in this direction, "- said to Vestnik Kavkaza Director of the Analytical Center of MGIMO Andrew Kazantsev.
"The decision of the Kazakh authorities on shale gas production looks pretty strange, since Kazakhstan always positioned itself as a state rich in hydrocarbons. Astana stated that it could easily increase gas production to 80 billion cubes of gas per year," senior researcher of Russian Institute of Strategic Studies Azhdar Kurtov said. He pointed out to Vestnik Kavkaza that Kazakhstan is now in a rather interesting position. On one hand, the desire to begin development of shale gas may be caused by the fact that the potential areas of gas production in the Caspian Sea remain under the control of foreign companies that became part of Kazakhstan in the early 1990s on favorable conditions for them and unfavorable conditions for Kazakhstan itself.
However, selling the gas, even if it 100% becomes the property of the national companies, is not profitable under the current circumstances, since it can be transported only through Russian territory. Russia as a gas producer is now facing the Third Energy Package of the European Union, which limits the ability to purchase gas from its monopoly companies, i.e. drillers, transporters and end sellers of gas.
In addition, a traditional consumer of Central Asian gas, primarily Turkmen gas, was Ukraine. Kiev, according to recent reports, has agreed to buy only 1 billion cubic meters of gas. While debate continues, a sharp drop in demand from the traditional buyer of Central Asian gas took place. And how Kazakhstan will increase gas production in these circumstances is a big question.
However, Karim Masimov said that Kazakhstan has an important place in the existing energy chains. "We believe that the development of efficient energy markets is in our common interest. It is a common interest for producers, transporters and consumers of energy. We believe that as an important partner for the East and West, as a bridge between East and West, Kazakhstan is a state that plays an important role in the energy chain," he said. "We seek to diversify the routes of energy supplies and our geographic coverage," Masimov concluded.
In this context, Azhdar Kurtov noted that it is becoming clear that the desire to develop shale gas is caused by the intention to diversify gas routes. "What is shale gas? It is a gas from stubborn layers. This means that this gas is accompanied mainly by coal deposits that are not located in the Caspian Sea, but in Eastern Kazakhstan. Coal mining is in north-eastern Kazakhstan. In this case, the buyer will not always be Europe or Ukraine, but China. Since this transport arm is much shorter," Kurtov said.
In the expert’s opinion, with the project in shale gas production the Kazakh authorities can count on building up supplies in China. "And if so, it is quite possible that this is done to oppose Russia, as the latest talks between the Russian leadership and the Chinese concerned the so-called western route - a pipeline through the territory of the Russian Altai. It is possible that Kazakhstan is trying to get ahead of the Russian project "Altai", Kurtov suggests.
According to him, Kazakhstan does not have such a necessity to build domestic gas consumption to make it through the development of shale deposits. Alternatively, this gas can be sold to Kyrgyzstan and Tajikistan. But the consumption of these countries is minimal, and investing big money in the production of shale gas does not make any sense. The sales market can only be the Chinese one.
