Projects financed by the EDB
Launching utilisation of associated Gas at the Kenlyk oilfield in Kazakhstan
Hundreds of millions of people regard the giant flares at burning above oilfield drilling rigs and refineries as an inevitable component of oil production, perhaps as one of its more disturbing symbols. About 100 billion cu m of associated gas are flared every year in the world.
Associated gas is a mixture of gaseous hydrocarbons that are dissolved in oil and which are released when oil is produced or refined. Primarily, this is a mixture of propane and isomers of butane. Oil gas is used as fuel and processed into propylene, butylenes and butadiene for the manufacture of plastics and rubbers.
The flaring of gas results in the emission of carbon dioxide, nitric oxides, sulphurous gases and soot; it requires huge oxygen consumption and produces excessive heat that is wasted. These factors are detrimental to the environment because they aggravate the greenhouse effect and are harmful for health. Emissions caused by associated gas flaring equate to an estimated 10% of all industrial emissions.
In addition to this, gas flaring is a vivid representation of the inefficient use of natural resources and squandering of profit. Utilising the gas, processing it and selling it primarily to petrochemical and utility companies, can help optimise oil companies’ costs and improve the profitability of hydrocarbon production.
The issue of how to utilise oil gas efficiently is important all over the world. Up to two thirds of all gas produced is flared. However, modern technologies exist to collect and utilise it, making flaring commercially unattractive.
This issue is topical for the EDB’s founder states, Russia and Kazakhstan. In 2009, for example, Russia’s seven largest oil companies flared almost 20 billion cu m of oil gas.
In late 2008, the EDB began financing a project utilising associated gas at the Kenlyk field in Kyzylorda Oblast, Kazakhstan. The Bank provided US $ 25 m for the project, for a period of eight years, under an agreement with Kazfrac LLP. Total project financing reached US $ 31.4 m.