Oil giants Shell and Eni are under renewed pressure from the Kazakh government to commit to building a multibillion-dollar gas processing plant at the Karachaganak oilfield, one of the country’s largest foreign-led hydrocarbon projects.
Despite the partners’ economic concerns about the plant’s potential to impact the field’s profitability, Kazakh authorities are pushing for a definitive commitment. The government’s main goal is to curb the reinjection of associated gas back into reservoirs and instead redirect it to serve growing domestic energy needs.
Karachaganak is operated by the Karachaganak Petroleum Operating (KPO) venture, which includes Shell and Eni, and is a key part of Kazakhstan’s hydrocarbon landscape, along with the Tengiz and Kashagan projects. These three developments together contribute more than 70% of the nation’s crude oil output.
Kazakh President Kassym-Jomart Tokayev has declared the expansion of gas processing capacity a top national priority, underscoring his administration’s focus on energy security and self-sufficiency.
The mounting pressure highlights the delicate balance between foreign investor returns and state-driven energy policy, as Kazakhstan seeks to leverage its oil wealth for domestic economic development.
