BMB Munai Launches Gas Utilization Project

BMB Munai subsidiary Emir Oil Co. has executed an agreement to have Ecotechnic Chemical AG construct a natural gas utilization facility in Kazakhstan's Mangistau region that will use Ecotechnic processing technology. Ecotechnic has completed numerous similar projects in the Russian Federation.

The approximately $3-million facility will be constructed on Emir Oil's exploration license territory in western Kazakhstan. It is slated for completion late this year. Initially, the facility will have the capacity to process 3,532 mcf og gas per day. Its capacity can be enlarged at substantially lower incremental cost to meet the requirements of increased field production, added BMB in a written statement. Natural gas prices in the region have ranged from $0.60 to $0.90 per mcf during the past 12 months.

Following construction, an equal joint venture between Emir and Ecotechnic will operate the gas utilization plant. In exchange for providing financing for the facility, Emir Oil will be paid 25 percent of the operating income of the joint venture. In addition, it will receive 50 percent of the net income as owner of one-half interest in the joint venture.

BMB stated that its decision to commence the gas utilization project represents a step toward transitioning itself from the exploration stage to the production stage under its license agreement. The company added that it has received written confirmation from the deputy governor of Mangistau that there is a ready market for natural gas in the region.