Kazakhstan to break ground on Saryarka pipeline in July
Thursday, Mar 15, 2018
Construction of a pipeline that will bring natural gas to Kazakhstan’s capital of Astana is slated to start in July, according to a senior energy official.

Astana, located in the north of the country, currently has only limited access to gas, relying mostly on coal to meet its rising electricity and heating needs. Authorities began discussing plans to build the Saryarka pipeline, which will connect the city with Kazakhstan’s southern gas network, in 2013. But its development was delayed, partly because of Kazakhstan’s economic crisis, caused by the slump in oil prices in late 2014.

With the Kazakh economy now seeing a modest recovery, the government has turned its attention to the project once again. Kazakh President Nursultan Nazarbayev ordered Parliament earlier this month to ensure that construction begin as soon as possible.

“It is planned to solve financing issues by June and to hold a ceremony for the welding of the first joint of the main gas pipeline in early July of this year,” Ziyash Kiyakbayev, who oversees gas sector developments at the Kazakh energy ministry, said on March 12.

Under the project’s first stage, a 1,081-km, 3 bcm per year pipeline will be built from the southern city of Kyzlorda, passing by Zhezkazgan and Karaganda before reaching Astana, at an estimated cost of 267.3 billion tenge (US$83 million). The pipeline will then be extended further north to Kokshetau and then Petropavlovsk, under second and third development stages. The fourth and final stage involves the construction of compressor stations in Zhezkazgan and Temirtau, near Karaganda.

Authorities also plan to convert two thermal power plants (TPPs) in Astana to run on gas instead of coal feedstock.

Kazakhstan’s national gas pipeline operator, KazTransGas (KTG), has been tasked with overseeing the project’s realisation. According to officials, a working group of various government bodies has been set up to resolve issues relating to the first stage of the pipeline’s development.
Foreign aid
Also speaking on March 12, Kazakh Foreign Minister Kairat Abdrakhmanov claimed that the government had received “concrete” proposals from British investors for their involvement in the project.

“The (ministry) will help attract investors to a new gas pipeline project that will connect a number of industrial centres and the capital with gas supplies,” Abdrakhmanov said in an article published on official media sites. “There are already concrete proposals from British investors.”

In November 2015, KTG and the UK’s Independent Power Corp. (IPC) signed a memorandum of understanding (MoU) for the construction of gas turbine power stations along the Saryarka pipeline’s designated route.

Four 400-MW plants were to be built in Astana, Karaganda, Temirtau and Zhezkazgan at an estimated cost of US$3.1 billion, although a binding agreement on the project was never reached.

Earlier this year, Kazakh Energy Minister Kanat Bozumbayev said that the government was in the final stages of talks with the European Bank for Reconstruction and Development (EBRD) on financing for the Saryarka pipeline. The bank has not confirmed this, however. Authorities have also suggested that funds could be drawn from the Development Bank of Kazakhstan.

The Saryarka pipeline will connect in the south with the Beineu-Bozoi-Shymkent (BBS) pipeline, which carries gas from fields in western Kazakhstan to urbanised areas in the southeast. The project will help tackle pollution levels in Astana, free up more coal for export and help Kazakhstan monetise its ample gas resources more efficiently.
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