On July 13, the government commission provided the preliminary results of the investigation into the causes of the accidents that occurred on July 3 at the Mangistau Nuclear Power Plant (MAEK) and the Atyrau Oil Refinery.
The press service of the Prime Minister reported ‘The current situation indicates shortcomings in forecasting the balance and planning of maintenance in the energy system of the Western region. The implementation of the project to strengthen the electrical network of the Western zone of the Unified Electricity System of the Republic of Kazakhstan has been delayed.’
There is a high accident rate of regional power stations in Atyrau and Mangistau regions, primarily MAEK (equipment outdated by 80%).
In addition, there are issues with the operation of the new Karabatan Utility Solutions gas power plant (supplies electricity to the KPI LLP polypropylene plant). At the Atyrau Refinery there are serious flaws in the external power supply. The responsibility of officials in an accident is established.
Even from such a short informational message it can be seen the real energy supply situation of the two largest oil-producing regions of Kazakhstan.
Atyrau Refinery fault?
On July 3, due to a sharp increase in the pressure at the boiler there was a forced shutdown of power unit #1 at the MAEK power plant. The incident led to a sharp decrease in electricity supply in the Atyrau and Mangistau regions.
Mainly, customers in the Atyrau region receive electricity from the Atyrau Power Station and MAEK as well as import from Russia (about 6-7 MW).
The Atyrau region receives on average from 30 to 90 MW per year from MAEK station and is supplied via the KEGOC energy system. The equipment of the plant (built in 1968) outdated by 80%.
The main supplier of electricity for Atyrau region is Atyrau Power Station. Its capacity is 474 M, and its available capacity is 15-20% lower. In the summertime the Atyrau Power Station produces 20% lower than the actual generated power due to the peculiarities of the boiler cooling system. In the summer, the main suppliers cannot provide the necessary volumes of electricity due to the fact that the production activity grows and energy consumption increases.
The Atyrau Power Station was built in 1963 and each season the company has problems with the supply of electricity due to emergency shutdowns, though, the company announced a modernization of its main facilities (the equipment outdated by 54%).
Until recently, the region was almost completely self-sufficient in electricity and there was a period when the region produced more than consumed but in 2018, the demand for electricity increased sharply by 30% (forecasted was 10%).
It should be noted that in the summer of that year that the modernization of the Atyrau Refinery was completed and now we discover that that the units to produce aromatic hydrocarbons (AH) and deep oil refining (DOR) are not provided with backup power.
Recently, after an accident at the MAEK the Atyrau Refinery production was stopped and it had to burn fuel on the flares. The flame could be seen from the other end of the city of Atyrau.
After the accident the government started talking about the need to build gas turbine power plant with a capacity of 154 MW for Atyrau Refinery. It even posted official invitation for potential partners to implement the project. Atyrau Refinery power supply has two systems of 35 kV voltage class (powered by Atyrau Power Station) and own power station with a capacity of 30 MW and 220 kV (powered by KEGOC JSC) for the new units of the refinery, aromatic hydrocarbons, and deep oil refining.
According to Atyrau refinery, the old units of the refinery’s the power supply is balanced by two power supply sources which forms a high level of reliability. The new units have only one source of power supply and do not have a backup system.
It turns out that the designers of the modernization of the plant knew that the processing capacity of the refinery would increase by 500 thousand tons, the depth of processing would increase and the production of 133 thousand tons of benzene and 496 thousand tons of paraxylene would commence but did not consider that more electricity would be required for all this. Former top managers of the Atyrau Refinery told us that during the reconstruction of the refinery designers included into the project the construction of Gas Turbine Power Plant but one of the top managers responsible for the reconstruction and modernization at that time did not support it.
Perhaps this is what the State Commission for Investigating the Causes of the Last Accident stated as “shortcomings in predicting the balance.”
TCO and all others
For the last five years Atyrau has experienced frequent power outages in the summer. In 2019, Atyrau Zharyk (electricity provider in Atyrau region) blamed abnormally hot weather in the region which caused a sharp increase in electricity consumption. At the same time, MAEK did not supply electricity to Atyrau due to the high temperature in the Mangistau region and electricity consumption increase.
The Atyrau regional energy department reported that the actual volume of electricity generation in the region was 740 MW and the deficit reached 300 MW. The region was forced to ask for the support from oil and gas operators that have their own power plants and generate energy for industrial needs. However, large operators such as TCO and NCOC also receive needed volumes from local energy generators.
TCO has a 440 MW gas turbine power plant and generated 217 MW of electricity and consumed 223 MW. NCOC has 311 MW gas turbine power plant and generated 129 MW while consumed 192 MW. Such companies that produce billions of cubic meters of gas had to source from the Kazakh general electricity network.
The Atyrau refinery had a generating capacity of 26 MW and consumed 113 MW. Refinery consumes electricity 4.3 times more than it generates.
After the recent accident at the MAEK, KMG stated that over the past 2.5 years (for all oil and gas producing assets of KMG) the total shortage of oil because of power outages amounted to 279 thousand tons and the financial losses exceeded 60 billion tenge (more than 130 mln. USD). The main producing assets of the national operator are located in Atyrau and Mangistau regions.
Instead of complaining about power outages Kazakh O&G operators could have generate electricity for own needs. Every year they flare or re-inject millions of cubic meters of gas. Critics note that they should have been investing in processing, build gas power plants and generate electricity. Experts also doubt efficiency of the national operator KMG and its ex-top managers who did not provide for the construction of a gas turbine power plant in the strategy. There are hopes that the current KMG CEO who has been raising the construction a gas turbine power plant since last year will still be able to resolve this important issue.
It should be noted that the Atyrau region accounts for more than half of Kazakhstani oil production. The region accounts for more than 30% of the country’s fixed assets according to the Institute for Economic Research.
Fixed assets are the material base of the economy. This includes land, buildings and structures, machinery, and equipment, and much more that is directly involved in the production process.
It is ridiculous that Atyrau region has such an economic potential and annually experiences a shortage of electricity during peak summer and winter time for last five years.