Bank of China provides $46 million loan for Oil Field Water Desalination Plant Project

In 2019, Karazhanbasmunai JSC (KBM or Каражанбасмунай) — a special purpose vehicle and joint venture of Citic Canada Energy (CCEL) [50% equity stake] and JSC KazMunaiGas Exploration Production [47.31% equity stake] — signed a $46 million term (loan) facility agreement funded by Bank of China for an Oil Field Water Desalination Plant Project. The borrowing terms of the loan are unknown. However, it is known that the borrower was expected to use the proceeds of the loan to partially finance a $65 million commercial contract with Citic Envirotech. The purpose of the project is to construct an oil field water desalination plant in Karazhanbas within the Mangystau Region and near the Karazhanbasmunai oil field. The new water processing plant is designed to recycle and reuse formation water and provide process water to improve recovery from the Karazhanbas reservoirs by steam injection. It is expected to have a capacity of 42,500 m3/day and use multi-stage filtration and reverse osmosis desalination technologies. It is expected that desalinated water production will amount to 17,000 m3/day. KBM consumes 17,500 m3 of Volga water from the Astrakhan-Mangyshlak water conduit. When it is operational, the desalination plant is expected supply water to the Karazhanbasmunai field and make a large amount of water available for the needs of the people in the Mangistau Region. In addition, up to 50 new jobs are expected to be created upon completion of the construction of the desalination plant. Citic Envirotech is the contractor responsible for project implementation. Project implementation commenced in September 2019 and the project was originally expected to reach completion by December 2020. However, the completion of the plant was later rescheduled to Q1 2021 due to the COVID-19 pandemic, which led to delays in equipment supplies.

Additional details

1. JSC KazMunaiGas Exploration Production is a KazMunayGas Exploration Production JSC is a KazMunayGas-majority-owned oil and gas company operating in the Republic of Kazakhstan. 2. Karazhanbasmunai JSC (KBM) is an associated company of Citic Group, which is also a controlling shareholder of Citic Envirotech. 3. In 2019, KMG and the Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan signed a Memorandum of Environmental Cooperation. Pursuant to this document, KMG’s subsidiaries, namely KBM, JSC “Mangistaumunaigas” and JSC “Ozenmunaigaz”, assumed the obligation to dispose of historical contaminations and to clean up the oil-contaminated lands within their contract territories as well as to dispose of and process the waste placed in unequipped sludge collectors.

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