Russ Oil-Gas

07-12-2006 Kommersant - Gazprom management committee sanctioned the project to set up a 50/50 venture with Kazakh state-run company, KazMunayGaz. The venture that is slated for launch in 2007 will process all gas of Kazakhstan. Then, part of the gas will go to meet domestic requirements of the country, while the remainder will be exported via another sub of Gazprom and KazMunayGas – KazRosGas. Yesterday, Gazprom management committee gave the go-ahead to setting up a pari passu venture of Gazprom and KazMunayGas on the assets of Orenburg Gas Processing Plant. In addition to refining gas of Karachaganaksk field of gas condensate, Kazakhstan, the venture will focus on rebuilding Orenburg Plant. Under the feasibility study, Gazprom is expected to contribute half of the plant's facilities worth 9.5 billion rubles, said Alexander Ryazanov, deputy chairman at Gazprom management committee, while Kazakhstan will have to provide money for its half. The overall value of the plant has been estimated at 19 billion rubles. All documents under the project were forwarded to Kazakhstan. "We intend to seal all necessary documents this fall and establish the venture before late this year to launch it already in 2007. The pattern and the exact amount will be determined over negotiations, which have just started," said KazMunayGas 1st Vice President Zhaksybek Kulikeyev. At first, the crude gas will be delivered to Orenburg Plant for processing, then, all gas will go back to Kazakhstan. KazMunayGas will buy some portion for internal needs. Another venture of Gazprom and KazMunayGas, KazRosGas, will acquire the remainder for export deliveries, said a source at the plant. "KazRosGas will sell gas in Europe," Kulikeyev pointed out. "We would like to see the price of $140/ths cu meters on Kazakh-Russia's border and equally share it with Gazprom."