Construction of the Saryarka gas pipeline (Phase I, Kyzylorda–Astana)
Project description
Phase I of the pipeline, which spans 1,061 km, begins in the southern region and connects to the Beineu–Bozoi–Shymkent gas pipeline, which is part of the Kazakhstan–China gas pipeline system, and runs from Kyzylorda to Astana.
The financing was obtained through two bond issues:
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bond issue 1 (KZT 85 billion) for institutional investors; and
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bond issue 2 (KZT 102 billion) for the EDB in syndicate with the Development Bank of Kazakhstan (DBK), with a financing period of 10 years.
Financing was provided from the EDB’s own funds (KZT 51 billion) and a loan for the same amount from the DBK, totalling KZT 102 billion.
The construction of the Saryarka gas pipeline proceeds in phases.
Phase I was constructed in a record time of 11 months, compared to the standard construction period of 36 months.
The construction and operation phases created over 900 and approximately 200 jobs, respectively.
The project contributes to environmental improvements in and around communities by reducing emissions and promoting the decarbonisation of the economy.
Goals and objectives
The Saryarka gas pipeline is a significant infrastructure project aimed at gasification of Kazakhstan’s central and northern regions and improving the environmental situation in the region.
The pipeline has provided access to gas for 2 million people and 211 communities and was completed in record time.Project objectives:
- ensuring reliable and uninterrupted gas supplies to Kazakhstan’s central and northern regions;
- improving the environmental situation;
- enhancing living standards;
- promoting energy security in Kazakhstan and generating employment opportunities and increasing tax revenues.
Figures and facts
Integration effect
The project contributes to the economic integration of the Bank’s member states, including an increase in mutual trade with Russia, as a significant portion of large-diameter pipes used for the gas pipeline was supplied by Russian plants.
Contribution to SDGs
The Saryarka gas pipeline is part of a system of gas pipelines in Central Asia, Russia, and China.
It addresses Kazakhstan’s priority to develop transport infrastructure. The Saryarka gas pipeline project enables the conversion of utilities and enterprises to natural gas, as well as its use for heating and cooking in residential buildings. This transition is expected to improve the fuel and energy mix and enhance the environmental situation in gasified areas.
The project was included in the President’s Five Social Initiatives Programme, as announced by the President of Kazakhstan on 5 March 2018. It aims to eliminate inequality and provide access to gas for 2 million people in Kazakhstan’s central and northern regions.[1]
It also helps improve the environmental situation in communities along the pipeline route, contributing to their environmental sustainability[2].
Compliance with the principles of investment complementarity and mobilisation
In view of its social component, the project was financed through a bond programme involving the Eurasian Development Bank, the DBK, and other institutional investors. The financing periods are 10 and 15 years. The bonds have been listed on the open market.
Environmental impact
[1] UN SDGs 7 and 10.
[2] UN SDG 11.
AstanaGas KMG, Borrower’s sponsors/participants: Samruk-Kazyna, Baiterek Venture Fund
