Image courtesy of Eni.

Production at the Kashagan oilfield in the Caspian Sea will be suspended for another year after the project was hit with a $4 billion pipe repair bill.

The field, already one of most expensive oil projects in the world, was suspended a few weeks after initial production started up in September 2013.

Pipelines connecting the field to an onshore facility were found to be leaking sulphur rich gas.

Kashagan is run by a consortium that includes Royal Dutch Shell, France’s Total, Italy’s Eni, ExxonMobil, Japan’s Inpex, China’s CNPC and Kazakhstan’s state owned KazMunayGas.

The costs of the repairs and restarting the field have been estimated at between $1.6 billion and $3.6 billion.

However, sources close to the project said the consortium will likely choose the most corrosive-resistant repair option that would cost over $3.6 billion, the Financial Times said.

The consortium has already spent about $50 billion to develop the project.

Kashagan, located in Kazakhstan, was expected to produce as much gas as Libya.

The field faced multiple delays and cost overruns before starting production in September 2013.

The repairs will halt production for about a year. Production at Kashagan is expected to resume in the second half of 2016.

The year long suspension of Kashagan has stalled Kazakhstan’s annual output.

Kazakhstan expects to produce 1.64 million barrels per day of crude this year, unchanged from 2013 levels.

As Kashagan faces another year of delays Kazakhstan is looking for ways to keep production stable, Reuters said.


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