Tengiz Oil Production Plant, Kazakhstan

The oil processing plant in Tengiz is a project undertaken by the TengizChevroil (TCO) partnership. TCO acquired the Tengiz oil field in the western part of Kazakhstan in 1993.

Since that date, it has undertaken a number of capital investment programmes to increase production of crude oil and natural gas.

Expansion

In January 2008, TCO implemented an expansion programme to increase the plant's capacity to 540,000 barrels of oil and 760 million cubic feet of natural gas. The first phase of 90,000bpd increased oil production to 400,000bpd. The expansion programme was completed in September 2008, along with the sour gas injection plant and the Second Generation Project.

Tengiz infrastructure

The Tengiz oil field is one of the biggest in the world. It contains 24 billion barrels of high quality oil and 6-9 billion barrels of recoverable oil. It is deep, having a target depth of 4,500m. It also contains significant gas reserves of 18,000 billion cubic metres.

The field required a great deal of infrastructure investment for development. Most of this was designed and implemented by the Russian Technical Design Institutes, but a consortium of western contractors built the processing plant. The consortium included Lurgi, Litwin and Lavalin.

The processing plant is made up of building blocks. Each building block is called a KTL (from the Russian for 'complex technology line') and contains two trains of gas-oil separation, including oil-water separation and stabilisation and sour-gas compression, two trains of amine-based acid-gas removal, two trains of Claus sulphur plant and tail-gas treating, one common gas-processing plant, one shared on-plot utility block, and one shared control room.

Fifth train

De-bottlenecking of the plant was taken up prior to 2004. A fifth train was installed as part of the Second Generation Project in 2008. De-bottlenecking in past expansion led to the sulphur plant capacity exceeding requirements because H2S levels have in practice been not only lower than expected, but also lower than the plant was designed to handle. It was decided that there was sufficient margin to handle existing sour gas flows and the flow from a new train.

The new fifth train has utilities, a plant-wide control room and a gas-processing plant that can handle excess gas from KTL 1 and 2 as well as the new train.

Fifth train options

An in-depth study was carried out to decide the best use of the extracted oil. There were three main options under consideration.

The first option considered was converting the LPG to fuel. The most significant advantages would be: a significant reduction in flaring sales gas, a reduced risk to market LPG and reduced logistics and safety problems due to lower export volumes.

Disadvantages include a high necessary capital expenditure because of the need to construct a gas export line, a low net present value, the cost of converting gas turbines, the requirement to operate the demethaniser colder and the necessity of burning excess non-sales gas.

The second option considered was to sell the LPG direct to market. The advantages would be that there is a broad market for the products, it would minimise flaring, have a good net present value, use conventional processes and use available fractionation equipment. Disadvantages include having to store, load and export large quantities of LPG, the transportation logistics of LPG, uncertainty in the LPG market and a relatively high cost.

The third option considered was converting the LPG to liquids. There are several advantages to this approach. It would retain the focus on the core business objective of exporting oil by increasing crude production by 2,500 tonnes per day. As no flaring would be necessary, this option would be relatively environmentally friendly.

Under a liquids scheme there would be a potentially higher value of the product gasoline. The scheme would also have the advantage of exploiting a diversity of export outlets. Disadvantages include a high necessary capital expenditure, the use of technologies new to TCO, higher operational complexity and additional utility requirements.

The LPG-to-market option was recommended and approved.

About TCO

TCO has Chevron as its major partner (with 50% ownership of the joint venture). Mobil holds a further 25%. Kazakhstan owns a 20% share, and the remaining 5% belonged to the Russian Lukarco.

With the acquisition of BP's 54% share in Lukarco in December 2009, Lukoil obtained 100% ownership of Lukarco and indirectly got a 5% share of Lukarco in the Tengiz project.