BG Group PLC (BG.LN) said Tuesday it plans to change the timetable of the third phase of the Karachaganak gas and condensate project in Kazakhstan in anticipation that the cost of development will fall.
"It is BG Group's view that full advantage should be taken of an expected downturn in oil and gas project costs, due to substantial falls in raw material costs and activity levels," the company said in a statement.
"BG Group has initiated discussions with KazMunaiGas around alternative phasing of project expenditure to ensure that the full phase 3 capital commitment is not made at the peak of the cost cycle. These moves are expected to secure improved returns for the Republic of Kazakhstan and investing partners," it said.
Phase 3 of the project is expected to boost condensate production to 16.5 million tons a year and gas sales to 16 billion cubic meters a year.
Karachaganak has produced record volumes so far in 2008 and reserves and production potential remain unchanged, the company said.