The heads of the Russian and Kazakh state-owned companies and the Central Asian republic's energy minister negotiated a long-term contract for supplies of gas produced at the Karachaganak deposit in northwestern Kazakhstan to be processed at a facility 130 kilometers (80 miles) away in Orenburg.
The Karachaganak deposit is being developed by Karachaganak Petroleum Operating, an international consortium that includes some leading world oil and gas companies and Russia's No. 1 independent crude producer, LUKoil. The deposit is expected to increase output to 25 billion cubic meters by 2012.
The board of Gazprom, the world's largest gas producer and a major exporter, approved the joint venture idea in mid-July. The board of directors is still to make a decision on the project.
Gazprom chief Alexei Miller, KazMunaiGaz President Uzakbai Karabalin and Energy Minister Bakhytkolzhoi Izmukhmambetov also discussed a contract for Kazakh gas supplies to Russia in 2007.
Kazakhstan has about 2,000 billion cubic meters of proven gas reserves. Natural gas reserves, including the shelf of the Caspian Sea, are estimated at 8,300 billion cubic meters.
The former Soviet republic's annual gas production in recent years has stood at about 12 billion cubic meters, 5 billion of which has been consumed domestically. Kazakhstan plans to increase production to 40 billion cubic meters a year by 2020 and is also considering increasing exports.
Supplies to Russia have been carried out via KazRosGaz, a joint venture between Gazprom and KazMunaiGaz. The Kazakh-registered company also oversees processing at Russian facilities, marketing and other activities.
