Russ Oil-Gas

03 September 2007 - Upstream OnLine - Russian gas giant Gazprom will not gain access to gas from the huge Karachaganak field in Kazakhstan before 2012, the company said today. 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 producer KazMunaiGaz agreed last year to set up a 50-50 venture at the Russian Orenburg plant and invest $1.5 billion in its expansion. But both Gazprom and KazMunaiGas have said they needed to persuade Karachaganak's operators to sell gas at mutually acceptable prices before the venture starts working, a Reuters report said. Karachaganak is co-led by Italy's Eni and Britain's BG Group, which each hold a 32.5% stake, while US supermajor Chevron owns 20% and Lukoil 15%. In June, Gazprom and the Western venture agreed on 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 metres of sulphur-laden Karachaganak gas at Orenburg for 15 years. Gazprom supplies Europe with a quarter of its gas needs at an average price of between $230 per 1000 cubic metres and $250 per Mcm. Prices in Russia are capped at around $40 per Mcm, but they are set to more than double by 2011 as it embarks on a major reform of its gas and power markets, Reuters said.