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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.

The project involved the construction of a facility to collect and process associated gas. Chemicals produced from it (liquefied propane-butane and casing-head gasoline) are widely used as fuel by utility companies and as feedstock by petrochemical and organic synthesis plants.The facility was built within two years of financing being made available and was commissioned in December 2010.

The project aims to improve the efficient consumption of natural resources, to protect the environment and improve the environmental situation. It also has an impact on the sustainable economic growth and diversification of Kazakhstan’s economy, through the development of the chemical sector. The project created new jobs and ensures additional tax revenues. The majority of output is exported.

EDB Member States

  • Russian Federation


  • Republic of Kazakhstan

    of Kazakhstan

  • Republic of Armenia

    of Armenia

  • Republic of Tajikistan

    of Tajikistan

  • Republic of Belarus

    of Belarus

  • Kyrgyz Republic