Participants of XI Eurasian KAZENERGY Forum recognize the role of fossil fuel in ensuring the region’s energy security

Russia acts as the Forum’s main partner on the second day

The XI Eurasian KAZENERGY Forum devoted to "Creating the Future Energy" continued today, September 8, 2017, in the Palace of Peace and Reconciliation in Astana (Republic of Kazakhstan). The official partner of the second day of the Forum was the Russian Federation.

Opening the plenary session of the Forum, the Prime Minister of the Republic of Kazakhstan Bakhytzhan Sagintayev noted that today the energy world is going through a period of sweeping changes, reflected in the development of a new innovative model of the industry development. The role of Kazakhstan, whose economy is based on the development of natural, primarily energy resources, becomes important, taking into account the fact that in the foreseeable future, the main global energy demand will be met by hydrocarbons.

Exporting over 60% of the extracted raw materials, Kazakhstan makes a significant contribution to ensuring global and regional energy security, maintaining the status of a reliable and responsible supplier of energy resources in the markets. However, our country, as a raw material supplier, needs to do more than just increasing the energy resources production and export volumes. We are ready to work actively in the sphere of saving and rational use of natural resources, energy saving and energy efficiency, introduction of green technologies for sustainable development. We want to make hydrocarbon energy clean, efficient and environmentally responsible. According to the prime Minister, all this will reduce the risk of a gap between the energy supply and demand, stabilize the market, affect climate change.

According to the Minister of Energy of the Republic of Kazakhstan Kanat Bozumbayev, who moderated the plenary session, in recent years, our country has been consistently promoting the initiatives of the Head of State aimed at balanced development and use of world energy resources. They contribute to strengthening of our country's position in the global energy market. We are strong supporters of the principles of the "Sustainable Energy for All" initiative. The government of the country implements successful deep system transformations in the industry as part of the Concept of transition to green economy.

Deputy Prime Minister of the Russian Federation Arkady Dvorkovich said that ensuring the energy future is a key topic of the day. According to him, despite the existing international declarations and initiatives in sustainable energy development, the issue related to specific steps remains uncertain, and "the degree of uncertainty is high".

He noted that in the process of finding an acceptable world oil price, Russia, which is one of the world's largest energy suppliers, became the main driver of the OPEC+ agreement. Despite the fact that we share the goals of renewable energy development, we all need to understand that the global economy will not survive without fossil fuels. According to A.Dvorkovich, renewable resources are a good, but expensive source of energy supply. Therefore, the transition to their common use cannot be quick and easy.

He called the energy balance in Russia reasonable, considering that coal plants are just 15% of the total generation volume, while in other European countries this figure sometimes reaches 40%, as, for example, in Germany.

K.Bozumbayev noted that in such countries as Kazakhstan and Russia with their huge hydrocarbon resources, fossil fuels will remain the main energy source for many years to come. However, he added that we and other countries will certainly benefit from the experience of those countries that managed to cross the "raw material threshold" and provide themselves with energy from alternative sources. An example of such a country is Iceland. It became the first European country, in which renewable energy accounts for almost the entire amount of energy consumed.

Speaking about the OPEC+ agreement, the Minister of Oil and Mines of Venezuela Eulogio del Pino noted that, as a member of the Organization of Petroleum Exporting Countries, his country calls for establishing an equilibrium in the market. Over the past 20 years Venezuela has been able to achieve a significant reduction of poverty thanks to revenues from oil exports. At the same time, this country with large reserves of hydrocarbon raw materials remains committed to promotion of the sustainable energy of the future.

As the fifth President of Iceland (1996 - 2016) Olafur Ragnar Grimsson stressed, it took his country many years to become a leader in the RES market. Today Iceland is ready to share with the world its own invaluable experience in development of geothermal energy. At the same time, he added that without solving a set of problems, the commitments made in Paris at the conclusion of the historical climate agreement "will be empty".

Commenting on his speech, the RK Minister of Energy noted that, the role of green energy in Iceland is indeed different from that in other European countries, because they are not yet ready to completely abandon fossil fuels, such as coal, oil and gas. "After all, these sources of raw materials are the main ones for more than half of the countries in Europe. In this regard, your country's experience is indeed very valuable for all of us," he said.

Minister of Energy of the United Arab Emirates Suhail Mohammed Al Mazroui spoke on the government strategy that determined the areas for the development of energy. According to the Government's plans, the UAE steps up implementation of projects related to clean energy and is going to stop subsidizing the energy sector.

As K.Bozumbayev noted, Kazakhstan and the UAE have similar plans to achieve the RES’ share in the total energy balance to 50% by 2050.

According to Kairat Kelimbetov, the Astana International Financial Center that he manages, created at the EXPO site, will become the backbone of green energy development. The Center will provide financing for breakthrough projects, creating unprecedented conditions for investors for capital raising.

The plenary session was followed by an interactive discussion with world energy leaders on "Future Energy: Change Factors and Growth Strategies". It was attended by Chairman of the Board of KazMunayGas NC JSC Sauat Mynbayev, Director for International Hydrocarbons Production Projects at Royal Dutch Shell Andrew Brown, President of ExxonMobil Production Company Neil Duffin, Executive Vice President of Eni Luca Cosentino, Senior Vice President for Europe and Central Asia at Total Michael Borrell and President of the Society of Petroleum Engineers (SPE) Janeen Judah. The issues related to development of global energy in the context of changes and the agenda for sustainable development were discussed, and the experience of different countries in forecasting and achieving energy security was presented.

This day’s program also featured program sessions, such as "Exploration and Hydrocarbon Resources: Looking into the Future", "Clean Energy - Contribution to the Future", "New Technologies and Solutions in the Nuclear Industry: Digital Technologies Introduction Practices", "Intellectual Electric Power Industry: From Production Optimization to Supply Quality Improvement", "Energy efficiency and energy saving: a hidden resource", "Renewable energy: global development trends”.

During discussions of modern geological exploration activities, Deputy Chairman of KAZENERGY Association Uzakbay Karabalin presented full information on the Eurasia project. He reminded that in June 2017, in the presence of the Prime Minister of the Republic of Kazakhstan Sagintayev B.A in Astana, the Ministry of Energy and Geology and the Subsoil Use Committee of the Ministry of Investment and Development and a group of interested companies, potential participants of the Eurasia international project, including KMG-Eurasia LLP, Agip Caspian Sea B.V., RN-Exploration LLC, CNPC International Ltd., SOCAR and NEOS Geosolutions, signed a Memorandum of Understanding. According to U.Karabalin, until the end of 2017, they are to agree on the schedule of negotiations, develop the principles of cooperation, project management, working program and budget of the project. These issues will form the basis of the consortium agreement and the geological study contract. As U.Karabalin said, development and implementation of the Eurasia project will take at least six years, at an estimated cost of 500 million US dollars. The project is planned to be implemented in three phases from 2018 to 2023.

Chairman of the Geology and Subsoil Use Committee of the Ministry of Investment and Development of the Republic of Kazakhstan Akbatyr Nadyrbayev noted the interest in geological exploration from companies that are already operating in our country. At the same time, as he said, application of innovative technologies becomes a priority in prospecting operations. "Despite the fact that the hydrocarbons era is becoming a thing of the past, prospecting of new hydrocarbon resources is still a priority for geologists," he said.

The program session on "New Technologies and Solutions in the Nuclear Industry: Digital Technologies Introduction Practices" was of great interest to the Forum participants.

As it is known, according to Rosatom, during the next 50 years, people will consume more energy than was spent in the entire previous history. Now the consumption rate is growing much faster than it was previously predicted, the greenhouse effect control imposes restrictions on oil, gas and coal burning at TPPs, but alternative energy sources will be used on an industrial scale and at competitive prices no earlier than in 2030. In this situation, active development of nuclear power could be a solution to the problem.

Today nuclear energy is entering a new stage of development, after almost 60 years of operation. According to the most conservative estimates of the Russian nuclear group of companies Rosatom, NPPs with a total capacity from 300 to 600 GW will be built abroad in the next 30 years.

Rosatom plans to build 40 units of nuclear power plants in 15 countries in the next 10 years. The ceremony of the first pile driving in the foundation of the shore infrastructure for the floating nuclear thermal power plant (FNTPP) “Akademik Lomonosov” in Pevek (Chukotka Autonomous District), which has no analogues in the world, was a new round in the development of the world nuclear industry. The FNTPP should be put into operation in 2019 and will become the world's most northern nuclear power plant.

Market players note that the advantages of nuclear energy are huge energy intensity (1 kilogram of uranium with enrichment of up to 4%, used in nuclear fuel, at complete burnout, releases energy equivalent to burning of about 100 tons of high-quality coal or 60 tons of oil); reuse (uranium-235 does not burn completely in nuclear fuel and can be used again after regeneration, unlike ash and slags of organic fuel, and a complete transition to a closed fuel cycle is possible in the long term, which means almost no waste); reduction of the greenhouse effect (NPPs in Europe prevent emission of 700 million tons of CO2 annually, and the operating NPPs in Russia prevent emission of about 210 million tons of carbon dioxide into the atmosphere annually); as well as economic development.

The world nuclear energy is now facing the challenges related development of related industries and technological modernization. For example, focus areas in innovative development of Rosatom include modernization of existing technologies, designed to increase the competitiveness of Russian nuclear power products in foreign markets; creation of new energy technologies; leadership in related markets of new materials, nuclear medicine, security systems. Thus, implementation of the WWER-TOI project at NPP-2006 will allow to build inexpensive and efficient power units in the near future, which will increase the world demand for Russian NPPs. The scale of the work carried out at Rosatom in modernization has no analogues in the world. It includes improvement of gas centrifuges, increase in the capacity of power units, etc. The Proryv project provides for creation of new generation nuclear energy technologies based on the closed nuclear fuel cycle with fast neutron reactors.

Another objective of the industry is to build a low-enriched uranium storage facility. The project is being implemented in East Kazakhstan region under the agreement signed last year between the Government of the Republic of Kazakhstan and IAEA and should provide a mechanism for ensuring guaranteed supplies of nuclear fuel to different countries in case of violation of existing conditions.

The initiatives and agreements announced at the Forum were included in the Resolution, which was adopted at the end of our event. The Forum participants recognized the important role of fossil fuel in long-term and stable energy supply. They agreed to develop the existing major oil and gas projects, taking into account their capital intensity, technological features and low prices for energy resources. In particular, regarding Kazakhstan, it is mega-projects on development of Kashagan, Tengiz and Karachaganak fields. A promise was made to continue modernization and optimization of the existing pipeline system to ensure reliable oil and gas supplies to consumers, to cooperate in the sphere of exploration and prospecting to ensure a stable resource base for the oil and gas industry, and to accelerate technological modernization in the oil and gas and energy sectors. The projects in the oil and gas industry and in the electric power industry will be implemented with the obligatory use of clean technologies aimed at minimization of their impact on the environment, as well as at resource saving and improvement of energy efficiency.

At the Forum, Kazakhstan stated that it calls for joining efforts of the entire energy community of the region to address a number of challenges. Otherwise, the regional energy markets will remain unpredictable and exposed to risk, and the escalating problems will lead to irreparable consequences. The Forum participants agreed that in this regard such international projects as EXPO-2017, Ministerial Energy Conference and Eurasian KAZENERGY Forum, which were held this year in the heart of Eurasia, Kazakhstan's capital Astana, give us a good chance for joint construction of a reliable foundation for efficient energy future.