The President of Kazakhstan held a meeting on development of the gas industry

The meeting on development of the gas industry with participation of the Head of the State Kassym-Jomart Tokayev was held in Nur-Sultan via videoconference.

The reports were made by the minister of energy Nurlan Nogayev, the chairman of the management board of Samruk-Kazyna JSC Almasadam Satkaliyev, the Akim of Nur-Sultan Altai Kulginov, the Akim of Karaganda oblast Zhenis Kassymbek, the Akim of Turkestan oblast Umirzak Shukeyev, the general director of Tengizchevroil LLP Kevin Lyon. The meeting was attended by the chairman of the management board of KazTransGas JSC Kairat Sharipbayev.

According to the press service of Akorda, opening the meeting, the Head of the state noted the importance of the industry for our country and for the global energy system.

– The gas industry occupies an important place in the socio-economic development. Gas consumption in the country is growing every year, but the rate of gas production does not correspond to this growth. New projects are being launched to convert industrial facilities to gas. The number of people who consume blue fuel is growing. Therefore, the demand for gas will only grow. And the supply must meet the demand, ” Kassym-Jomart Tokayev said.

After hearing the reports of the participants of the meeting, the President stressed that the current model of development and management of the industry requires updating.

– The main discoveries of hydrocarbon raw materials during the years of Independence occurred in oil fields. There is virtually no progress in exploration and development of gas fields, including assets in the Caspian Sea. Therefore, the expansion of the gas resource base through geological exploration is a priority for the Government and the Samruk-Kazyna Fund, the Head of the state noted.

In his opinion, special attention should also be paid to increasing the investment attractiveness of the industry. Under the current system, subsurface users are not interested in increasing gas production and building gas processing facilities. The Government has been instructed to develop approaches to attract investment in gas production.

As Kassym-Jomart Tokayev stressed, KazTransGas will become a national gas company and will carry out activities along the entire chain from geological exploration to the sale of final products. The President stressed that he considers the proposal of Samruk-Kazyna to transfer the priority right of subsurface use for new fields to KazTransGas to be correct.

– At the same time, the Government should carefully consider all aspects and conditions of granting such a right. It is extremely important not to monopolize access to gas fields. The government should create conditions for independent exploration and development of gas fields by independent investors. If the concept of a vertically integrated gas company is successfully implemented, the Government, together with Samruk-Kazyna, will have to study the possibility of holding an IPO of KazTransGas as early as 2022, including through the people’s IPO. This will significantly revive the financial market and enable citizens to have a part of the country’s gas wealth, ” the President said.

The Head of the state called the improvement of pricing in the domestic gas market one of the priority issues. According to him, the active gasification of the regions has led to an increase in gas consumption. Over the past five years, the domestic market has increased by 40 % – from 12 to 17 billion cubic meters of gas. At the same time, the price of gas in Kazakhstan is one of the lowest among the CIS countries.

– Earlier, I gave instructions to smooth out gas tariffs by a region and provide the population with affordable gas. We should step up our work in this direction. In short, we need a new clear and transparent pricing model, coupled with a well-thought-out system for protecting socially vulnerable segments of the population, as well as sectors of the economy that are sensitive to gas prices. I ask the Government to develop approaches no later than September 1, Kassym-Jomart Tokayev instructed.

To modernize the gas transportation system, the President instructed the Government and the Fund to use additional sources of financing, including income from exports and, possibly, from privatization. Special attention was paid to the gasification of Kazakhstan, the level of which exceeded 53 % in the country. Six regions are more than 90% gasified. At the same time, the President pointed out that the work on gasification of the capital, Karaganda and Akmola regions is behind the schedule.

– The Saryarka main gas pipeline was put into operation on time in 2019. This socially significant country-wide project is aimed at improving the environmental situation and improving the quality of life of the population. Due to the sluggishness of the akimats, the deadlines for completing the actual gasification of housing are postponed. Therefore, the Government will have to update the gasification plan for these regions with clear deadlines, indicators and responsible persons, ” the Head of the State said.

Kassym-Jomart Tokayev believes that the full supply of gas to the north of the country, in particular, to the Akmola and North Kazakhstan regions, deserves special attention. The gasification can give a significant boost to the industrial development of these regions, making them more attractive for business and living.

– This is a matter of national importance. There are at least two approaches: the continuation of the main gas pipeline “Saryarka” or connection to the Russian gas transportation system. Each of the options has its pros and cons. The government, together with the akimats of the regions, should decide on the choice in the near future, ” the President stressed.

The President once again reminded that there is a steady tendency all over the world – decarbonization of industry and economy. Kazakhstan, without standing aside, declared that it will achieve carbon neutrality by 2060.

– Achieving a zero balance of emissions will require structural industrial and economic changes. I am instructing to increase the volume of gas generation by one and a half times by 2030 – from 21 to 33 billion kilowatt-hours. Gas should occupy at least a quarter of the country’s energy balance. According to my instructions, by this time the share of renewable energy sources should be 15%. Thus, by the end of this decade, almost half of the country’s electricity will be generated from more environmentally friendly sources, the Head of the state summed up his speech.