OIL & GAS SUPPLIES

Kazakhstan 2018 | ENERGY & MINING | B2B

The oil and gas supply chain has concentrated on quality during a period of depressed oil prices and is betting on strong future growth in the country.

Alexandra Bekisheva
ALEXANDRA BEKISHEVA
General Director
KazGiproNefteTrans (KGNT)
Gurvir S. Khera
GURVIR S. KHERA
Group CEO
KES Group

What have been some recent achievements?

Alexandra Bekisheva It was a very busy year in operational terms. Milestones included the delivery of a number of major contracts. We have successfully participated in a number of projects at different locations around the country, including oil refineries in Shymkent and Atyrau, a petrochemical plant in Pavlodar, facilities development projects at Karachaganak, and more. We continued to support industry-defining projects such as FGP/WPMP of TCO. Green energy is another area where we increased our focus. As an example, a wind-turbine field was designed and now supervision is being carried out. KGNT made significant progress toward the set objective of business expansion and reorganization to optimize efficiency. In particular, KGNT successfully passed prerequisites for an EPC contract. Through the year KGNT attached great importance to strengthening its capabilities, enriching its relationship with world-industry leaders, and continuing to build a sustainable legacy.

Gurvir S. Khera In order to have a strong client base, we needed to have the right first-class technology partners and a professional, skilled team locally to deliver goods and services according to the commitments made. Delays or performance failure will cost clients on the projects, which is detrimental to our reputation. That is why we give utmost importance to service delivery to our clients in the most professional manner possible. We have partnered with major global players such as NOV, Honeywell, MAN Diesel & Turbo, Erreesse, and others. We have over 16 major companies that are our key technology partners that we represent from Europe, the US, China, and India. A few of the recent major projects where KES was involved include the Asia Gas Pipeline, modernization of Pavlodar Refinery, and Zhaikmunai GTU 3; all are large projects that were successfully executed on time and with top-quality materials supplied. We are now focusing on other upcoming projects such as the TCO Future Growth Project and KPO expansion, which will soon be in full swing. We opened our Middle Eastern operations out of Dubai and now have projects in Central Asia, the Middle East, and Africa.

What impact has the fluctuation in oil prices had?

AB The oil and gas industry has undergone substantial challenges since 2014. The main contour of price fell from USD115/barrel to USD30/barrel with continuous volatility, gravitating to the decade minimum. Turbulence introduced an industry need to squeeze costs, leading to project deferral and in some cases cancellation. In the current industry context, we believe that now, more than ever, our existing and potential clients need a long-term reliable relationship with their contractor of choice, such as KGNT, in order to support them in the optimization of their investments.

GSK Kazakhstan has abundance of natural resources providing sustainable growth in the economy. For instance, Kashagan started producing in October 2016 and is the largest offshore discovery in recent times. We expect the economy to grow at a fast pace in Kazakhstan given the upcoming projects in oil and gas and in other energy industries. Not many projects like TCO FGP are taking place in the world currently, and it is probably the single-largest industrial project of this size in the world—it is expected to be a USD36 billion investment. Furthermore, the Karachaganak Petroleum Operating BV (KPO) expansion is about to start. Oil prices have risen and that has given confidence to investors in Kazakhstan. The outlook is extremely bright. Oil prices have doubled since this time last year, and these projects are happening at the right time. For the next few years, up until around 2025 perhaps, there will be significant developments.