Kazakhstan’s KazMunayGas to Deploy Drilling Rig in Turkmenistan’s Caspian Sea Waters

Kazakhstan’s national oil and gas company, KazMunayGas, is set to use its drilling rig in the Turkmen sector of the Caspian Sea for the first time.

“A subsidiary of Kazakhstan’s national oil and gas company KazMunayGas, KMG Drilling & Services, has signed a contract with [the UAE oil and gas company] Dragon Oil to provide drilling services in the Turkmen sector of the Caspian Sea,” the chairman of the KMG’s board, Askhat Khasenov, said while addressing the international conference “Oil and Gas of Turkmenistan” held in the Turkmen capital of Ashgabat on 24 October, according to the Turkmen news website Orient.tm.

Khasenov further detailed that “the Kazakh jack-up floating drilling rig, Satti, will be used for the first time at the Cheleken field as part of this project. Satti is Kazakhstan’s first offshore drilling rig, designed domestically and built at a shipyard in the Mangistau Region.”

The Satti rig measures 72 meters in length, 64 meters in width, and 119 meters in height, with a total weight of 10,800 tonnes.

In addition to the new drilling venture, Khasenov proposed KazMunayGas (KMG) as a potential partner for drilling, well overhauls, and underground repairs. To facilitate more efficient operations in Turkmenistan, KMG Drilling and Services has established a branch office in Ashgabat.

On a related note, Kazakhstan’s national company QazaqGaz signed a strategic cooperation agreement with Turkmenistan’s State Concern Turkmengaz on October 10, aiming to enhance the gas industry. This comprehensive agreement includes plans to expand the resource base, conduct exploration activities, and involve QazaqGaz in major Turkmen gas fields, including the Galkynysh field.

The agreement also covers major pipeline projects, such as the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, as well as the import of commercial gas from Turkmenistan to Kazakhstan.

Turkmenistan holds substantial gas reserves estimated at 13.4 trillion cubic meters (473.2 trillion cubic feet), ranking it fourth globally after Russia, Iran, and Qatar. Nearly 75% of Turkmenistan’s exports come from the gas sector, with China and Russia as its primary buyers, fueling much of the country’s recent economic growth.

Turkmenistan currently supplies China with over 30 billion cubic meters of natural gas annually via three lines (A, B, and C) of the Central Asian Gas Pipeline. Upon the completion of line D, annual supplies of Turkmen natural gas to China are expected to reach the contracted 65 billion cubic meters. The country is also developing fields both on the Caspian Sea shelf and onshore in the Balkan region, with companies like Eni, Dragon Oil, and Petronas active in oil and gas production within contract areas in the Caspian.

Meanwhile, Kazakhstan’s proven recoverable gas reserves are approximately 3.8 trillion cubic meters, comprising 2.2 trillion cubic meters of associated gas and 1.6 trillion cubic meters of natural gas. The primary reserves are located in four major fields: Karachaganak, Tengiz, Kashagan, and Zhanazhol.

Kazakhstan generates more than 85% of its natural gas from the giant Tengiz, Kashagan, and Karachaganak fields in the Caspian Sea area. In 2023, the country produced a total of 59 billion cubic meters of natural gas.

Kazakhstan’s annual natural gas consumption is expected to reach 20.9 billion cubic meters this year and grow to 40 billion cubic meters by 2030. After a recent three-year contract with China, Kazakhstan increased its natural gas exports to 5.8 billion cubic meters in 2023.