In another crisis at a giant but star-crossed oilfield, Kazakhstan’s Kashagan will be shut for at least two years while specialty pipelines are made to resist the unforeseen impact of toxic gas, according to a source close to the project.
In recent weeks, word has dribbled out that Kashagan—one of the largest supergiant oil finds of the last half-century—may lie dormant through the summer (paywall) and perhaps longer. But this is the first concrete report that the gravity of the problem means that Kashagan will produce no oil through at least 2016 and possibly 2017.
The costly new lines—probably with a nickel alloy—will replace two 55-mile pipelines, one for oil, one for gas. Already, $50 billion has been spent, and the delay means a delay in billions of dollars in cashflow expected by Kazakhstan itself and major oil companies including ExxonMobil, Shell, Eni, and France’s Total. Kashagan contains an estimated 13 billion barrels of recoverable oil reserves.