Overview of the development of Kazakhstan's gas sector in 2024-2025

Update: In the PDF version of the report, the wording of paragraph 3 on page 9 has been clarified. Here is the updated wording:

In the current plan (for 2025–2029), the launch of the Kashagan Gas Processing Plant is scheduled for 2026, and the Zhanazhol Gas Processing Plant — for 2027.

In 2024, we prepared a review of Kazakhstan's gas sector based on 2023 results, which examined key industry development features. This report continues the analysis and covers sector dynamics in 2024–2025, as well as the main factors that will shape its development in the coming years.

In 2024–2025, gross natural gas production increased, with a significant portion of the growth attributed to associated gas used in the technological cycle of major oil and gas fields. In 2025, the volume of reinjection reached nearly half of gross production, meaning that the increase in total production was not accompanied by a comparable expansion in marketable gas supply.

Alongside resource base characteristics, a number of economic and infrastructure challenges persist. One key issue is the current pricing model in the domestic market. The current level of regulated prices for marketable gas affects the economic performance of market participants, constraining the profitability of relevant operations and impacting the financial results of the national gas operator, JSC «NC «QazaqGaz». Under these conditions, attracting private capital to gas production and processing projects remains one of the key tasks for the industry's further development. This aspect is also reflected in the Comprehensive Plan for the Development of the Gas Industry for 2025–2029, which highlights major challenges such as «the capital intensity of expanding the resource base, the need to attract private investment, the requirement for additional processing capacities, and insufficient profitability of projects in gas transportation infrastructure».

Internal demand dynamics are becoming increasingly significant. Marketable gas consumption continues to rise amid ongoing regional gasification, the connection of new consumers, industrial development, and gas-fired power generation. The surplus of marketable gas is shrinking compared to the parameters of the previous gas industry development plan. This trend indicates a gradual narrowing of the gap between domestic consumption and available supply, necessitating continued monitoring of the balance between domestic consumption and supply of marketable gas.

The investment attractiveness of projects in exploration, production, and gas processing depends, among other factors, on the economic parameters of gas sales in the domestic market. Given current profitability levels and high capital intensity, many industry projects are implemented with state participation and involvement of national companies. One potential direction for the industry's further development could be the establishment of pricing and other economic conditions that support the investment attractiveness of projects while maintaining affordable gas prices for domestic consumers.

The new Comprehensive Plan for the Development of the Gas Industry for 2025–2029 outlines a set of measures to improve the pricing model, including revising restrictions on increasing purchase prices. A more detailed presentation of the gas balance forecast, the schedule for domestic price changes, and calculations to determine the timeline for achieving profitability in domestic gas sales could help better assess the economic feasibility of projects and enhance their appeal to investors.