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Kazakhstan's national company, QazaqGaz, has signed a major contract with South Korea's Hyundai Engineering to construct a new gas processing plant (GPP) at the Karachaganak field. While this development is crucial for the nation's economy, it highlights nearly two decades of missed opportunities.

The new plant will be capable of processing 5 billion cubic meters of raw gas annually. The project's total cost is estimated at approximately $6 billion, with construction slated for completion by 2030.

A Two-Decade Delay

However, the construction of this plant should have commenced in the mid-2000s as part of the third phase of Karachaganak's development. The original plan aimed for the new GPP to supply the domestic market with 19.8 billion cubic meters of commercial gas and 2 million tons of liquefied gas per year. Instead, the government permitted the Karachaganak consortium (KPO) shareholders to forgo building processing capacities. They opted to reinject the produced gas and focus on extracting more liquefied raw materials.

Billions Lost Due to Past Agreements

In connection with these past agreements, experts recall the abrupt departure of Maksat Idenov, the first deputy chairman of KazMunayGas, in 2010. He was the lead negotiator for the production sharing agreements (PSAs) on behalf of Kazakhstan. It was later revealed that the terms of these agreements were unjustifiably increased, and investor repayment periods were extended.

According to expert assessments, Kazakhstan could lose close to $390 billion by the conclusion of these PSAs due to these terms. The state's share of profit decreased from 77% to 53%. Notably, shortly after Idenov's departure, he was appointed to a high-ranking position within the structure of the Italian company Eni, one of the consortium members.

Currently, lawyers hired by the Kazakh government are pursuing legal action against Idenov in international arbitration, citing corruption charges. Furthermore, the public is raising legitimate questions about which former officials permitted the Karachaganak consortium to forgo investing in the construction of a Kazakh GPP.

This information was reported by the Infohub.kz news agency.