Kazakh authorities are contemplating taking over the Karachaganak gas processing plant project due to delays and cost overruns caused by foreign investors.

Source: orda

According to Bloomberg, citing insider sources, the Karachaganak Petroleum Operating consortium—led by Eni and Shell—has pushed back the plant's completion from 2028 to 2030 while increasing the cost estimate to nearly $6 billion. Additionally, investors are reportedly requesting that Kazakhstan contribute $1 billion to help cover expenses and ensure the project's profitability.

Kazakhstan has expressed dissatisfaction with this request and may transfer the project to the state oil company KazMunayGas (KMG). On May 19, KMG CEO Askhat Khasenov publicly criticized the slow pace of construction. Authorities are also displeased with the revised cost, which has almost doubled from the initial estimate of $3.5 billion.

Neither the Ministry of Energy nor Karachaganak Petroleum Operating has provided an official comment.

Tensions between Kazakhstan and the consortium regarding costs have been evident since September of last year. Foreign companies are seeking either a higher price or reduced capacity to secure returns, but the Kazakh side remains opposed, especially given the increasing demand for domestic gas processing.

The Karachaganak consortium has also faced penalties for environmental violations.