Kashagan cost set to rise due to pipeline replacements
Published by Elizabeth Corner,
Senior Editor
World Pipelines,
The cost of Kashagan, already the world’s most expensive oil project, is set to rise by nearly US$ 4 billion as the companies developing it are forced to replace 200 km of leaking pipelines.
The cost rise is another setback for the venture, run by a consortium made up of Royal Dutch Shell, ExxonMobil, Total, Eni and CNPC.
The consortium spent some US$ 50 billion on the field’s development, but after startup, production lasted only a few weeks before leaks of poisonous gas forced its suspension. Earlier this month a government minister admitted it would not restart until at least 2016.
This week, the cost of replacing the pipelines and restarting production has been estimated at between US$ 1.6 - 3.6 billion, depending on the specification of the equipment chosen.
A year ago, when the first trickle of crude briefly flowed, it was already eight years behind schedule. Having cost US$ 43 billion, it was US$ 30 billion over budget.
Edited from various sources by Elizabeth Corner
Sources: Financial Times, Economist
Read the article online at: https://www.worldpipelines.com/business-news/10102014/kashagan-cost-set-to-rise-due-to-pipeline-replacements/
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