Coal: Kazakhstan has major coal production in the Karaganda and Ekibastuz basins. There are 13 mines in Karaganda (mostly underground) that produce high quality coking coal.
Coal production in Kazakhstan declined from 143 million short tons in 1991 to 80 million short tons in 1997. This resulted in closing half the mines in Karganda.
Ekibastuz has three privatized surface mines that produce brown coal for power plants. These include the Russian utilities Sverdloenergo and Chelyabenergo. Sverdloenergo acquired two mines (Severny and Bogatyr No. 9) as payment for unpaid debts for power supplied to Kazakhstan.
A historical summary of coal production and consumption in Kazakhstan is shown in Table 4.
Table 4: Coal Production and Consumption in Kazakhstan, 1992-98
(in millions of short tons)
1992 1993 1994 1995 1996 1997 1998
Production Anthracite Bituminous Lignite 139.49 n/a134.91 4.58 123.32 n/a118.17 5.15 115.33 n/a110.02 5.31 91.77 n/a87.65 4.12 84.46 n/a80.50 3.96 80.08 n/a77.35 2.73 76.83 n/a73.74 3.09
Consumption 94.16 87.16 88.69 79.68 62.50 62.84 63.78
n/a - not applicable
note: components may not add to total due to rounding
Source: DOE/EIA
Nuclear:
Kazakhstan currently operates one nuclear power plant, a 350 megawatt (MWe) unit located outside Aktau in the Mangyshklak Oblast on the shore of the Caspian Sea in western Kazakhstan.
This unusual plant is a BN-350 sodium-cooled fast breeder reactor, the first of a series of fast breeder reactors developed in the former Soviet Union. It achieved first criticality in 1973 and it has been operating since then.
It suffered several accidents, the most serious of which occurred in 1974; a depressurization led to a water-sodium explosion when water from the tertiary circuit entered the secondary circuit with the sodium coolant. The explosion cracked the casing of the heat exchanger.
In March of 1998, the Kazakh Energy Agency announced plans to build a second nuclear power plant on the northern shore of Lake Balkash. It is expected that it would be 2030 before the plant is completed.
It will have six Russian VVER-640-type reactors. Russian nuclear engineering companies would be the main contractors for the plant. The first three reactors would be commissioned in 2006. It is currently estimated that the plant would cost $5 billion.
Energy Infrastructure:
Kazakhstan has a major need for more oil and gas pipelines. There are six pipelines that connect Kazakhstan to other central Asian republics and Russia, but the gas producing regions in the western part of Kazakhstan are not connected to the relatively populous southeast and industrial north parts of the country.
Kazakhstan has two separate gas pipeline networks: Kazakhgaz is responsible for distribution in the west, while Alaugaz handles gas distribution in the southeast.
The lack of pipelines also keeps Kazakhstan from adequately exploiting its oil and gas and transporting them to world markets. Since Kazakhstan is landlocked, the pipelines have to go through neighboring countries.
At present, most of the oil has to go through the Russian pipeline system. Then it goes by rail through Russia to the Black Sea and the Baltic. It goes by barge across the Caspian to Baku.
In 1997, Kazakhstan signed the Caspian Pipeline Consortium (CPC) agreement. The consortium includes Russia, Oman, and several oil companies, such as Chevron and Mobil. The agreement calls for building a pipeline from the northeast shore of the Caspian to Novorossiisk in Russia on the Black Sea. An eventual capacity of 67 million tons/year is planned after 2005.
It is expected that the CPC Pipeline will be used for transporting natural gas liquids from the natural gas production plant being constructed at Karachagnak.
Kazakhoil, Kaztransoil, British Gas, Lukoil, AGIP, and Texaco have signed an agreement to build a 285-mile pipeline to transport the condensate from Bolshoy Chagan (near Karachagnak) to Atyrau, where it will connect with the CPC pipeline.
This condensate pipeline, costing $440 million, will start with a capacity of 140,000 bbl/d and build up to 240,000 bbl/d.
Other pipeline routes are being considered, such as going through the Caucasus to Turkey. China has also proposed building a pipeline to Kazakhstan. Routes through Iran and Afghanistan have also been suggested.
Electricity:
Kazakhstan has two separate electrical networks, the Russian network in the northwest linking to Russia and the central Asian network in the south linking to Kyrgyzstan and Uzbekistan.
In the summer of 1998 Kazakhstan agreed with Kyrgyzstan to split the grid into these northern and southern parts.
Because of the split grid, Kazakhstan imports 8.4 billion kilowatthours (kWhr) per year of power for some areas and exports 1.7 billion kWhr of power per year to others.
Kazakhstan has been slow to pay for imported power and Russian suppliers have often cut off the power for non-payment. Kazakhstan also imports power from Kyrgyzstan and Uzbekistan.
An historical summary of electricity generation and consumption in Kazakhstan is shown in Table 5.
Table 5: Electricity Generation and Consumption in Kazakhstan, 1992-98
(in billion kWhr)
1992 1993 1994 1995 1996 1997 1998
Net Generation hydroelectric nuclear geo/solar/wind/biomass conventional thermal 78.6 6.8 0.5 n/a 71.3 73.6 7.6 0.4 n/a 65.6 63.2 9.1 0.4 n/a 53.8 63.2 8.2 0.1 n/a 54.8 55.6 7.3 0.1 n/a 48.2 49.5 6.4 0.3 n/a 42.8 49.3 6.0 0.1 n/a 43.2
Net Consumption 86.2 83.4 64.9 64.3 56.8 49.5 48.8
Imports 28.6 27.0 11.6 8.0 6.8 3.5 3.4
Exports 15.4 12.0 5.5 2.5 1.7 0.0 0.4
n/a - not applicable
generation components may not add to total due to rounding
Source: DOE/EIA
Electric Industry Overview:
Kazakhstan's production of electricity is predominantly from its 54 fossil-fuel power plants. Currently, 80 percent of the electricity is from high ash coal burned with inadequate environmental controls. There is a visible particulate problem in Almaty, the largest city.
There are also five hydroelectric plants. Only about 10 percent of Kazakhstan's hydroelectric potential of 60 billion kilowatthours has been developed. An historical summary of installed electricity generating capacity in Kazakhstan is shown in Table 6.
Table 6: Installed Electricity Generation Capacity in Kazakhstan, 1992-98
(in thousands of MWe)
1992 1993 1994 1995 1996 1997 1998
Hydroelectric 2.23 2.23 2.23 2.23 2.23 2.23 2.23
Nuclear 0.14 0.14 0.07 0.07 0.07 0.07 0.07
Geothermal/Solar/Wind/Biomass n/a n/a n/a n/a n/a n/a n/a
Conventional Thermal 16.49 16.49 16.32 16.81 16.75 16.76 16.76
Total Capacity 18.86 18.86 18.63 19.12 19.06 19.06 19.06
n/a - not applicable
note: components may not add to total due to rounding
Source: DOE/EIA
Kazakhstan currently has one nuclear power plant at Aktau. There is a plant to build a new nuclear power plant near Lake Balkash with three 640 MWe units each costing $2 billion for a total of $6 billion.
They expect these units to come online between 2005 and 2012 to supply Almaty and export power to China. There are also plans to build five new combined heat and power (CHP) facilities:
Uralskaya TETS -- 150 MWe
Atayubinskaya TETS -- 450 MWe
Mainakskaya GES -- 300 MWe
Yuzhno-Kazakhstanskaya TETS -- 1280 MWe
Zapadno-Kazakhstanskaya TETS-1 -- 500 MWe
Kazakhstan has major economic problems in the power sector, with frequent power shortages since 1992. Several regions were without power during the past few winters.
The industries in the north of Kazakhstan consume about 70 percent of the electricity. The demand for power from these industries has declined to about half the 1990 levels as production levels decreased. Kazakhstan also has a major problem of non-payment of electric bills by domestic customers.
Kazakhstan has many obsolete power plants, with 94 percent of the gas turbines, 57 percent of the steam turbines, and 33 percent of the steam boilers more than 20 years old. There are large energy losses in transmission and distribution over the 285,000 miles of distribution lines.
KEGOC has estimated that $258 million will be needed to reconstruct the electricity network and overhaul the switching equipment to get better efficiency and reliability.
The World Bank agreed to extend a $140 million loan to Kazakhstan toward this project on December 22, 1999. Additional funding will be provided by KEGOC ($62.4 million) and the European Bank for Reconstruction and Development ($56 million).
The U.S. Trade Development Administration (TDA) has also awarded a $378,000 technical grant to KEGOC to support the World Bank-financed part of the project.
Kazakhstan is currently trying to privatize its electric system from generation to distribution. The Kazakhstan Electricity Grid Operating Company (KEGOC) was formed from the Kazakhstanergo the state utility.
All the major power plants have been privatized, comprising 85 percent of the power generating capacity. The largest plant, the 4,000 MWe coal-fired Ekibastuz No. 1 plant, was sold to AES in August 1996.
This one plant has 25 percent of Kazakhstan's electric generating capacity. Ekibastuz No. 1 is only operating at a 20 percent utilization rate, but AES hopes to increase it to 65 percent. AES also bought two hydroelectric plants and four combined heat and power plants with a combined capacity of 1,300 MWe.
AES is now the largest foreign investor in Kazakhstan's power generation, serving 10 percent of the electric customers in Kazakhstan. AES Silk Road also manages four energy retail marketing companies (AES Irtysh Power & Light, AES Sogrinsk TETS, AES Leninogorsk TETS, and AES Semipalatinsk TETS).
In July 1999, AES was awarded management rights for 15 years to manage the Ust-Kamenogorsk and Semipalatinsk distribution companies that are close to the three power plants that AES operates.
In July 2000, it was announced that AES will be constructing the Shulbinsk Hydroelectric Power Plant, building a cinder storage facility, and installing new equipment at Ust-Kamenogorsk Thermal Electric Power Plant.
AES is receiving a $30 million EBRD credit on these projects.
In 1999, Kazakhstan reached a preliminary agreement to transfer 51 percent ownership of Ekibastuz State Regional Power Station 2 (the only remaining power station that had not yet been privatized) to the Russian utility UES as payment for a $249 million electricity debt.
Access Industries is a U.S.-based corporation which has projects in Kazakhstan and Russia. They operate two of the three coal mines in Ekibastruz, which provides 70 percent of the coal for Kazakhstan's power plants.
Access also operates a 350 MWe power plant in the Northern Kazakhstan region, supplying heat and power. They plan to improve efficiency, using western technology.
Environmental Activities:
In Kazakhstan there are major environmental problems. In particular, the Ministry of Ecology and Bioresources has cited air pollution in urban areas, wastewater pollution, and solid industrial and domestic waste.
It is not clear how much attention will be devoted to solving them because of the other economic and energy problems.
In 1990 Kazakhstan had atmospheric emissions of 1,198,000 tonnes of nitrogen oxides (NOx) from fuel combustion. This included 253,000 tonnes from the energy industry, 43,000 tonnes from other industries, and 83,000 tonnes from small combustion sources.
In 1990 Kazakhstan had atmospheric emissions of 2,966,000 tonnes of carbon monoxide (CO) from fuel combustion. This included 29,000 tonnes from the energy industry, 623,000 tonnes from other industries, and 167,000 tonnes from small combustion sources.
Kazakhstan was a signer of the international agreements on Climate Change, Biodiversity, Desertification, and Ship Pollution. An historical summary of carbon dioxide (CO2) emissions from fossil fuel use in Kazakhstan is shown in Table 7.
Table 7: Fossil Fuel-related Carbon Dioxide Emissions in Kazakhstan, 1992-98
(in millions of tonnes of carbon)
Component 1992 1993 1994 1995 1996 1997 1998
CO2 from coal 38.80 32.19 22.52 22.62 19.87 20.38 21.07
CO2 from natural gas 10.34 7.62 7.72 5.78 7.43 7.20 6.90
CO2 from petroleum 16.37 13.95 12.40 11.39 10.23 8.70 9.12
Total CO2 fromall fossil fuels 65.51 53.75 42.64 39.79 37.53 36.29 37.09
note: components may not add to total due to rounding
Source: DOE/EIA
Privatization Status:
Privatization programs in Kazakhstan have made some progress. At present, 85 percent of the power generating capacity has been privatized. The privatization of the electric distribution system is moving more slowly.
A subsidiary of ABB Brown Boveri of Sweden was given a 25-year contract to manage the national power grid in 1997 but it was abruptly cancelled.
Kazakhstan is now in the process of privatizing its regional distribution companies, and several of the 15 regional electric distribution networks have been moved to private management. Almatyenergo is now run by Almaty Power Consolidate, a Belgian company.
Karagandaenergo is now run by National Power of the UK and Ormand. AES was awarded management rights for the Ust-Kamenogorsk and Semipalatinsk distribution companies that are close to the three power plants that AES operates.
The U.S. Agency for International Development is working with Kazakhstan to develop a power pool for the regional distribution companies.
Economic Situation:
In 1999, Kazakhstan's GDP growth rate was 1.7 percent and inflation rate was 8.3 percent. Kazakhstan is trying to move toward a free market economy.
The government has issued decrees on bankruptcy, taxes, banking, customs, stock exchanges, land, accounting and natural resources.
The general trend in Kazakhstan is to deal more with the West and less with the countries of the former Soviet Union. As of 1996, Kazakhstan's foreign debt was $3.3 billion.
Kazakhstan is encouraging foreign investment. The President of Kazakhstan has estimated that $10 billion in foreign investments have been made since 1991, and an additional $60 billion is needed, mostly in oil exploration. An historical summary of Kazakhstan's GDP and inflation is shown in Table 8.
Table 8: Kazakhstan's GDP and Inflation, 1994-9
Component 1994 1995 1996 1997 1998 1999
GDP* ($US billions) 12.6 16.3 21.0 22.3 24.5
Per Capita GDP* ($US) 756.6 1,009.0 1,319.1 1,406.1 1,551.4
Annual GDP Growth Rate**(percent) -12.6 -8.2 0.5 2.0 3.0 1.7
End-of-Year Inflation(percent) 1,158.3 60.3 28.7 11.2 9.5 8.3
* in 1998 prices ** compared to previous years
Source: National Statistic Agency of Kazakhstan; Kazakhstan Ministries of Economy, Finance
Trade and Investment:
Kazakhstan's exports in 1999 were $5.2 billion. The main exports were petroleum, coal, ferrous and nonferrous metals, chemicals, grain, wool, and meat. Exports went mainly to Russia, Ukraine, Uzbekistan, the Netherlands, and China.
Kazakhstan's imports in 1999 were $4.8 billion. The main imports were natural gas, machinery, and industrial materials. The largest imports were from Russia, Ukraine, Uzbekistan, Turkey, and Germany.
There are several promising areas for energy-related investment in Kazakhstan. Gas now being flared at production fields can be captured and/or used to generate electricity.
There is a need for appraisal activities at gas fields (especially those near populated and industrial areas) and metering infrastructure at international border locations. And there is need for much rehabilitation of existing power generation infrastructure for environmental reasons.
An historical summary of Kazakhstan's outside investment, debt, and net foreign reserves is shown in Table 9.
Table 9: Kazakhstan's Foreign Investment, Debt, and Net Foreign Reserves 1994-8
Component 1994 1995 1996 1997 1998
Foreign Investment*($US millions) n/a n/a 1,751.0 2,040.0 2,565.0
Total Debt(percent to GDP) 12.3 8.4 9.8 11.6 2.1
Net Foreign Reserves(percent to GDP) n/a n/a 7.1 7.1 7.5
* in 1998 prices n/a - not available
Source: National Statistic Agency of Kazakhstan; Kazakhstan Ministries of Economy, Finance
Source: United States Information Administration
© 2001 Mena Report (www.menareport.com)
