TBY talks to Vladimir Antonov, General Director of Exterran, on the opportunities on offer in Kazakhstan, cooperation with CNPC, and some of its major projects.
TBY What is Exterran’s background story to being in Kazakhstan?
VLADIMIR ANTONOV We’ve been in the Kazakhstani market for more than three years. Before 2008 the company was called Hanover Kazakhstan, and after May 2008 it became Exterran Kazakhstan. Exterran is a Houston-based company that was itself the product of a merger between two companies: Compressor Solution and Hanover. They united to form Exterran.
What opportunities did Exterran identify when it entered Kazakhstan in 2008?
There are a lot of opportunities here for Exterran. The President, Nursultan Nazarbayev, has strongly promoted the utilization and production of natural gas, and our equipment is perfectly suited to the small gas fields present in the country. Therefore, Kazakhstan was an obvious investment opportunity for Exterran. For a long time we were alone in the sector, but there are now competitors from Europe and Russia. Nevertheless, we remain the leaders.
What is your business strategy?
We have been the dealers and distributors of well-known companies like Caterpillar, Ariel, and Waukesha. We buy their equipment, install it on our skids, and then sell them on to our clients.
Your company has a comprehensive product portfolio in oil and gas production. Which of your products is most in demand in Kazakhstan?
We design gas plants and manufacture and produce vessels, tanks, pumps, compressors, and basically all the equipment on skids. Exterran manufactures vessels, pipelines, and tanks in Dubai then imports them here. Equipment like compressors, pumps, and gas motors are shipped here from the US. We install equipment on the skids in Houston, and then send them to Kazakhstan along with motor compressors.
Do you have training or maintenance services?
Yes, we have an aftermarket service in Kazakhstan. We also do pre-commissioning, commissioning, decommissioning, and start-up. We also do maintenance. For example, we now have one project in the Uralsk region where we are building a gas plant. Our duties include pre-commissioning, commissioning, start-up, and later the operation and maintenance of the plant. We also operated another plant in the Turgay region for three months.
Are you looking for more partnerships with international or Kazakhstani companies?
We have been involved in a local project in which we collaborated with local companies as well as with our Exterran specialists in Dubai. That was in the commissioning stage. In the operation stage we will use expatriates only for key positions, with the rest of the positions to be filled by local employees.
What do you think is the role of Exterran in terms of developing the full potential of the oil and gas sector in Kazakhstan?
We are going to train local employees, and in about six months to a year we will replace our expatriate labor force. It will be both cheaper for our company and a benefit for Kazakhstan. We are also going to train client employees, because they currently lack the skills required for this new sector.
What impact will your cooperation with Chinese National Petroleum Company (CNPC) have on Kazakhstan?
We just recently began working with CNPC. We installed more than 20 compressors in the field, working closely with both Chinese and local employees. We trained local employees, and took care of the commissioning and start-up, and after the start-up we even provided them with aftermarket service for a short period. Now, we’ve begun building new units with five specialists on the site, working closely with CNPC to install 10 more compressors.
Both Western and Chinese energy companies are active in Kazakhstan. Is Exterran focused mainly on new Chinese entrants to the market, or do you also work closely with Western companies?
Exterran has an office in China, and we have very good relations with the country. Our aim, however, is to have great relationships with all our clients, be they Chinese or other.
In addition to your activities in Uralsk and the North Caspian, do you have other major projects lined up?
We have a project in Aktyubinsk, which will be slightly bigger than our plant in Uralsk. We should be starting that project in either February or March 2012. We’ve already shipped equipment there and we will start the installation and commissioning process. We also have another project in Aktau, near the Caspian Sea. The plant has been started up, and we repaired one of the compressors for them as well, for which our client was very pleased.
What’s your outlook for the Kazakhstani economy in 2011?
The level of industry in Kazakhstan is definitely on the up, and this trend will continue to be a boon to Exterran. Metallurgy, oil and gas, agriculture, and agri-business are growing particularly quickly.
© The Business Year