Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gazprom to Wait for Kazakh Gas

Gazprom will not gain access to gas from the huge Karachaganak field in Kazakhstan before 2012, the company said Monday, disclosing the time frame for the first time.

Gazprom is counting heavily on imports of gas from Central Asia as its own production stagnates and new fields are not expected to come on stream before the middle of next decade amid rising demand for gas in Europe and at home.

Gazprom and Kazakhstan's state energy firm KazMunaiGaz agreed last year to set up a 50-50 venture at the Orenburg plant in Russia and invest $1.5 billion in its expansion.

But both Gazprom and KazMunaiGaz have said they needed to persuade Karachaganak's operators to sell gas at mutually acceptable prices before the venture starts working.

Karachaganak is co-led by Italy's Eni and Britain's BG, which each hold a 32.5 percent stake, while U.S. company Chevron owns 20 percent and LUKoil has a 15 percent interest.

In June, Gazprom and the Western venture agreed on the pricing of gas after years of talks, paving the way for Central Asian gas to flow to Russia.

Gazprom never disclosed details of the pricing agreement but said the partners would process 16 billion cubic meters of sulphur-laden Karachaganak gas at Orenburg for 15 years.

Gazprom supplies Europe with one-quarter of its gas needs at an average price of $230 to $250 per 1,000 cubic meters. Prices in Russia are state-capped at around $40 per 1,000 cubic meters, but they are set to more than double by 2011 as Russia embarks on a major reform of its gas and power markets.