Kazakhstan Oil Industry Is Booming

After repeated delays to the start-up of Kazakhstan’s giant Kashagan field, and not one, but two incidents that forced its shutdown in the first month that the field was on stream, some might call the project cursed.

But the latest in the string of mishaps – a gas leak that has prompted an indefinite shutdown of production until its source is fully investigated – may just come down to poor workmanship or not having enough materials on hand, a source told the Wall Street Journal.

“Oil from Kashagan had begun flowing on Sept. 11 after many years of delays and cost overruns. But two consecutive gas leaks have led the NCOC consortium to halt production indefinitely since Oct. 9.”

“The two leaks occurred on a pipeline that carries sour natural gas to the onshore processing plant, where highly corrosive sulfur is removed.”

“Preliminary findings suggest the leaks weren’t caused by corrosion, one of the people familiar with the matter said. Other potential causes being investigated are poor workmanship and inadequate materials.”

Stakeholders have sunk an estimated $40 billion, collectively, into the project. Some reports suggest that its 2013 start date is now put off until sometime in 2014.