Kazakhstan ranks 19th in the world and the 4th among CIS states by gas reserves. However, about one half of the population in the country have no access to gas and burn coal.
Gas consumption in Kazakhstan is steadily increasing – it has gone up almost by 5 billion cubic metres from 2017 to 2021, according to the Ministry of Energy. By results of 2021, the level of gas supply in the country was 57.67 per cent, i.e. 11 million people now has access to gas. Nearly 42 per cent of non-gasified Kazakhstanis, i.e. about 8-9 million people, have no access to gas and burn coal instead.
According to Minister of Energy Bolat Akchulakov, the least gasified regions are Atyrau, Almaty and Mangistau regions.
Sagymbai Zhanakhmetov is the long-term resident of Bigash village, Almaty region. According to him, their house was supposed to be gasified 10 years ago, but nothing has changed since then.
“Every year, they promise to lay gas, water supply pipes and internet cable. But every time, words remain on paper. We have burned coal or wood throughout all our lives. In winter, we buy 10 tonnes of coal, borrow money. Now I have poor health. I have visited the akim of the village many times, and he said we would have gas soon. But we don’t believe it,” Zhanakhmetov said.
The village of Zelyonoye in East Kazakhstan region was supplied with gas in 2014. However, not all houses were connected. Natural gas was supplied only to the akim’s house, some officials, and main buildings. Although the village is 5 km away from Uralsk, its residents have to burn coal, and carry water from the well.
“There are 113 houses in the village of Zelyonoye, we were happy to live almost in the city. However, conditions here are worse than in remote villages. Gas was supplied randomly, i.e. to the akimat, petrol station, etc. And they forgot to supply gas to the place where ordinary people live. We wrote a letter to the district akim, we file complaints every day, yet no one answered,” resident of village Balausa Seilkhanova said.
The similar situation is in the village of Mendikar, Kostanai region. Nearly 2,400 people lived here in 2010, now there are only 700. Village residents leave their houses and leave for other regions because there is no drinking water and gas in the village.
“It feels like everyone has forgotten about us. No one is interested in how we live. Although, the akim reports every year that the district is fully gasified. But we don’t see it. To buy coal, we save all the year round because the coal is delivered from the city. If we have gas and water, it would be easier to live here,” pensioner Kulpash Arzymetkyzy said.
Residents of village Alshaly in Tolebi district of Turkestan region have been promised to supply gas for a few years already. Although neighbouring villages have gas pipelines already, there is not enough money to lay the pipeline in Alshaly. Some residents are desperate to wait for the help of the authorities and are willing to pay for the gas pipeline themselves. Although this is a costly affair – 150 thousand tenge (341 dollars) from each private house.
“Our coal is of low quality, we buy it in winter at a ransom price, but it gives less heat. My child gets ill all the time, I have a renal disease. But our region is considered a warm one. Gas cylinders are very expensive, we buy them once in two months as we want to save some money. Now I cook outdoors. Sometimes, fires happen. I fear all the time that wind will blow when I cook. I don’t hope that it will be natural gas in our house,” said village resident Saira Bibolat.
The capital of Kazakhstan – Nur-Sultan – is not gasified in full. In the last thirty years, at least three unimplemented projects have been developed. Today, gas is available only in two district – nearly 3.5 thousand houses. To do this, over 680 kilometres of gas distribution networks have been built, local networks have been set up.
Nineteenth in the world
The gas issue in Kazakhstan is one of the key ones and in January 2022 it triggered mass protests and then disorders across the country. Because of no gas pipelines, some people buy liquefied gas in cylinders, and its price doubled at the beginning of the year.
On January 2, residents of Zhanaozen, Mangistau region, and Aktau took to the streets to protest and demand decrease fuel prices. The next day, numerous groups of protesters started to hold protests in Nur-Sultan, then residents of Atyrau, Almaty, Karaganda, Uralsk, Taldykorgan, Kyzylorda and Shymkent joined the protests.
Then protests turned into commotions. On January 6, the interim government introduced price limits to liquefied gas and fuel for six months, as well as the 180-day moratorium on increase of utility prices.
According to 2020 OPEC data, Kazakhstan ranks 19th in the world and 4th in CIS by gas reserves.
Gas output in the country was steadily rising until 2019, and then the production rates slowed down slightly. But the majority of natural gas produced in Kazakhstan is exported.
Kazakhstan has a general gasification scheme of the country until 2030, which should provide the maximum commercially viable level of gasification of people and increase the gas consumption share in the structure of fuel and energy balance of the country.
According to the document, the plan was to supply gas only to residential areas located near major main pipelines: gasification of Karaganda and North Kazakhstan regions, as well as Tarbagatai district of East Kazakhstan region was not on the agenda.
“It is commercially unprofitable to lay many-kilometres-long branch pipes to remote residential areas with few residents because their gas demand is much lower than development costs. Major investors or state subsidies are needed to make such projects commercially profitable. Only then remote areas will have gas,” said Nurlan Sauyrbayev, economist and project manager of Kulan information analysis centre.
At the government session at the end of May 2022, prime minister ordered to submit the updated project of the general gasification scheme until July 1. The question of gas supply to northern and eastern regions of the country is also being discussed.
Two options of connection are considered. The first one from Russian sources. The route will go through Barnaul-Rubtsovsk-Semei-Ust Kamenogorsk, with a branch pipe to Pavlodar, as well as Ishim-Petropavlosk-Kokshetau-Nur-Sultan.
The alternative option of gas supply is to supply gas from the main pipeline Saryarka, which is under construction now.
The final decision will be made in autumn. Until September 1, relevant bodies must hold integrated evaluation of these options.
Forecasted deficit
Every year, the state budget allocates nearly 36-40 billion tenge (82-91 million dollars) for the gasification of the country. According to officials, gasification of residential areas is in progress, but it is hindered by bureaucratic paperwork, corruption, accidents at plants, and low gas price. Moreover, according to minister of energy Bolat Akchulakov, the bulk of gas mains were built back in the Soviet period and today they require high investments for safe operation.
“An overall plan of gas industry has been worked out and submitted to the government. We expect it to be approved by the government soon. Now, there is no increase in production because frequent repairs of old plants lead to reduction in total liquefied gas output. We need to modernise the system for uninterrupted gas supply,” said Akchulakov at the “government hour” speaking to the parliament on June 6.
Local executive bodies funded by the budget build the main part of gas supply facilities with involvement of contractors. Then ready facilities should be transferred to QazaqGaz for further operation. As of 2020, the total number of un-transferred facilities in the republic was 1,227 facilities that cost 302 billion tenge (687.31 million dollars). The Ministry of Energy suggests to amend the budget code so that QazaqGaz is held liable for cash disbursements and quality of facilities.
In addition to the overall gasification, another problem arises. Experts forecast that Kazakhstan will face a gas shortage from 2024 along with the increasing consumption level as the domestic needs will exceed the available gas resources by approximately 1.7 billion cubic metres.
The head of the board of QazaqGaz, Sanzhar Zharkeshov, said there are not enough stimulating measures and gas prices are too low to increase gas production volumes.
“By 2030, we are planning to increase gas production by launching new projects, as well as by gas conversion instead of burning and gas reinjection. The general gasification scheme will be implemented with involvement of private investments and independent gas distribution organisations,” he said at the “government hour” to the parliament on June 6.
According to him, the gas industry of Kazakhstan can face a crisis in the years to come and the country can stop gas exports. The government has no clear plan of a way out of this situation so far. But this is a reason to start talking again about raising the price of natural gas for the people.