Tengizchevroil, the operator of Kazakhstan's largest oilfield, Tengiz, has declared force majeure on exports following a fire at the field's GTES-4 power generation facility on January 18. The fire at transformers serving two generation trains prompted a shutdown of oil and associated gas production. The company notified its long-term European customers of the force majeure on contractual deliveries via the Caspian Pipeline Consortium (CPC) system, stating it is taking all possible measures to restore power but cannot estimate the duration of the disruption.

Official Response and Investigation

Kazakhstan's Energy Ministry described the output suspension as a temporary safety measure. A deputy minister and a joint government-company commission are on site to investigate the accident that led to the shutdown of the gas-fired turbines. Neither the authorities nor Tengizchevroil have provided a timeline for restarting the GTES-4 plant or resuming production.

Significance of the GTES-4 Power Plant

The GTES-4 unit, commissioned under the recent $47 billion Future Growth Project, provides power to Tengiz's oil and gas processing facilities. It has five trains using General Electric turbines with a capacity of over 500 megawatts. The field's power infrastructure also supplies electricity to the local grid in the Atyrau region and gas to power plants in Atyrau and Mangistau.

Broader Impact on Kazakh Oil Exports and Production

The production halt at Tengiz has allowed Kazakhstan's other major projects, Kashagan and Karachaganak, to partially restore their oil and condensate output and exports. Their production had previously been curtailed due to export pipeline constraints stemming from a November Ukrainian drone attack on a key Black Sea export terminal and subsequent bad weather, which caused the CPC's storage facilities to reach capacity. Industry sources indicate Karachaganak's output has increased significantly, with a smaller rise at Kashagan.

Regional Power Supply Concerns

The incident has raised concerns over regional power stability. The Atyrau regional power utility warned major industrial customers of impending power rationing, advising them to prepare backup generators and be ready to halt processes due to potential supply interruptions, noting that the timeframe for restoring normal gas supply is unknown. Past blackouts in 2023 had already impacted oil operations in the region.