Dastan Abdulgafarov, Deputy Chairman of the Management Board for strategy, investments and development of business NC ‘‘KazMunayGas’’ JSC

Today, the global community is making intense efforts to combat climate change. In support of the Paris Agreement, nations and corporations set goals to reduce greenhouse gas emissions demonstrating their varying ambitions; carbon regulation is tightened up at the global, regional and national levels. 

Our country has not been left out of the climate agenda either. The President of the Republic Kassym-Jomart Tokayev has repeatedly stated Kazakhstan’s intention to achieve carbon neutrality by 2060.

The national company ‘‘KazMunayGas’’ also supported the country's goals. The company was the first in Kazakhstan to approve the Low-Carbon Development Program for 2022–2031 (hereinafter – LCD Program). The main goal of the program is to determine the company’s climate ambitions, systematize the main approaches and measures in the field of reducing the carbon footprint through an analysis of the existing potential, identifying key areas of development and increasing the level of readiness. 

Given the importance of the climate agenda, the company intends to reduce carbon dioxide emissions by 15% by 2031 from the 2019 level or 1.6 million tons of CO2. This indicator is planned to be achieved through energy efficiency measures and the implementation of renewable energy projects.

These goals correspond to the country-wide goals under the Paris Agreement on Climate Change. At the same time, 2019 is defined as the base year, the closest to the typical operating activity of the KMG group of companies.

It should be noted that in 2019, the direct emissions of the KazMunayGas group of companies amounted to about 7.4 million tons, and indirect emissions – 3.3 million tons. 

We intend to focus on moderate, balanced and consistent decarbonization of our operations. The company’s LCD program includes both current opportunities to reduce the carbon footprint, including energy efficiency improvements and the use of renewable energy, and additional activities for decarbonization. This includes projects related to the capture, storage and utilization of CO2, the implementation of forest carbon projects and the production of hydrogen 

It is obvious that the key factor in reducing the energy intensity and carbon intensity of KMG production is to increase energy efficiency and resource-saving at all stages of the company’s production cycle, both during production and during the transportation and refining of oil. Each enterprise of the KazMunayGas company is now obliged to develop its plans in this direction within the framework of the LCD Program. 

KazMunayGas pays serious attention to the use of renewable energy sources in the context of the possibility of using carbon offsets and reducing CO2. The company is working on several areas related to renewable energy. 

Firstly, the possibility of implementing wind and solar power projects is being studied. It is emphasized that this approach will allow developing competencies in the field of renewable energy, following the example of other global oil and gas companies, and will also increase the energy independence of the company’s assets.

Secondly, KazMunayGas is working on the issue of concluding direct contracts with the owners of renewable energy facilities for the purchase of ‘‘green’’ energy. The company can become a consumer of ‘‘green’’ renewable energy by concluding an offtake contract with large potential investors. This approach will make it possible to partially replace traditional electricity consumption with renewable energy without attracting serious investments in major construction work, thereby reducing the carbon footprint.

The third direction is that the construction of small-scale distributed and autonomous renewable energy generation units at the facilities of the KMG group of companies will allow using renewable energy technologies in the public utility sector and in production processes (preheating of oil during extraction/transportation, lighting, hot water supply and others). 

The signing of a number of memoranda with partners also indicates the KazMunayGas’ commitments in the field of decarbonization. 

In particular, they agreed to cooperate with Eni on the development of energy transition projects for the production and sale of electricity from renewable energy sources. The prospects for the implementation of projects in agriculture for the production of biofuels and in the field of hydrogen energy are also being studied. 

Together with Total Energies, SWF ‘‘Samruk-Kazyna’’ JSC and the Ministry of Energy agreed to participate in the implementation of a large-scale renewable energy project for 1 GW using energy storage systems. 

As to additional medium-long term decarbonization measures, the company, together with Shell Kazakhstan B.V., is exploring the possibility of implementing a pilot project on carbon capture, utilization and storage (CCUS). This technology is important due to its potential to reduce emissions throughout the energy system. 

Hydrogen production is also gaining momentum in the world today. The leaders of the oil and gas sector see hydrogen as an opportunity to expand their dominant influence. KazMunayGas has also started studying the prospects for hydrogen production in the long term. Currently, the company is working on the issue of creating a Competence Center for Hydrogen energy. 

The hydrogen mobility project to be implemented by Air Liquide in accordance with the signed memorandum will allow testing the use of hydrogen in transport at one of the company’s enterprises.

We have agreed with Linde technology company on cooperation and joint development of projects in the field of clean energy in Kazakhstan. The first stage of cooperation will explore the possibility of producing hydrogen and ammonia using natural gas as raw materials (‘‘blue’’ hydrogen and ‘‘blue’’ ammonia) and/or electrolysis of water (‘‘green’’ or ‘‘blue’’ hydrogen and ‘‘green’’ or ‘‘blue’’ ammonia). 

‘‘Low-carbon development become ingrained in global political, investment and trade agenda. Therefore, it is important for us to implement pilot projects in all these areas to build up our competencies and our own potential. If we get positive results, we will be able to scale them across the entire KazMunayGas group of companies,’’ – D. Abdulgafarov stressed.