Environmental management approaches

Environmental management system

KPO has certified to use the Integrated HSE Management System certified to comply with international standards ISO 14001:2015, ISO 45001:2018 и ISO 50001:2018, as well as HSE Policy targeted to continuous improvement. In 2023, KPO successfully passed the ISO 14001 audit that confirmed compliance with the requirements of the standard.

The key environmental commitments of the Company’s HSE Policy include the following significant impacts:

• prevention of the environmental pollution,
• reduction of greenhouse gas emissions
• biodiversity and ecosystems conservation,
• conservation of natural resources,
• continuous improvement in environmental performance.

As part of maintaining an effective environmental management system and in order to comply with the requirements of the new Environmental Code, KPO environmental procedures are regularly reviewed.

According to the RoK Environmental Code, KPO has an obligation to implement the best available techniques (BAT). In 2023, an integrated technical audit (ITA) for compliance with BAT was conducted. The ITA process was introduced in the RoK Environmental Code from 2021 and is the first stage of development and(or) revision of RoK Best Available Techniques Handbooks (hereinafter referred to as BAT Handbook).

Environmental aspects electronic management system

Environmental Aspects Register is developed and used by KPO to manage environmental aspects EnvAR.

Environmental Aspects Register of the Company’s divisions are annually reviewed and updated in line with the actual status. Based on the Company’s divisions registers, the Consolidated register of the most material environmental aspects is developed in order to devise additional activities/control measures to reduce risks and improve the environmental condition. In 2023, the Consolidated Register of Significant Environmental Aspects of KPO covered the following aspects:

1. Pollutant emissions into the atmosphere and greenhouse gases,
2. Waste formation and management,
3. Detection of unauthorized waste disposal,
4. Treatment and discharge of domestic waste water,
5. Generation and disposal of industrial waste water,
6. Spills,
7. Water resources consumption.

Environmental compliance

KPO runs its business in accordance with the environmental legislation of the Republic of Kazakhstan (RoK). KPO annually requests and obtains an Environmental Impact Permit (EEP) from the RoK Ministry of Environmental Protection. This permit sets the limits for contaminants emissions, discharges and limits for accumulation and burial of waste.

In 2023, two administrative fines in the field of environmental protection were filed in relation to the events of 2021–2022 for a total amount of KZT 214.52 mln. KPO voluntarily paid a fine worth KZT 164.4 mln for excess emissions of pollutants into the atmosphere. Currently, the Company is in the process of partial appealing the court decision that imposed an administrative penalty for exceeding pollutant discharge standards worth KZT 50 mln.

Implementation of the Environmental Code

In 2023, as part of the Environmental Code requirements the following was obtained:

• Environmental Impact Permit for KOGCF facilities for 2024;
• Environmental Permit for Atyrau Terminal facility for 2024–2030;
• Environmental Permit for Bolshoi Chagan OPS facility for 2024–2030;

In 2023, the Plan for implementation of the requirements of the new RoKK Environmental Code was 90 % completed.

During the year 2023, as members of the working groups under the Ministry of Environmental Protection, Geology and Natural Resources of RoK and the KAZENERGY Association, the Company took part in 84 meetings and commented and introduced proposals for 74 projects of the RoK laws and regulations in environment protection, as a result the following changes been made to corresponding RoK regulatory legal acts:

1. Rules for issuing Environmental Permits (EP) and Instructions for determining the facility category in connection with changes in the RoK Environmental Code from 05.07.2023:
   • the Environmental Permit (EP) form separates limits for the construction period and limits for operations;
   • criteria have been defined for classifying construction and installation works and reclamation and (or) liquidation work into categories I, II, III or IV. Some of the KPO non-process related construction and installation activities (temporary roads and sites, etc.) do not require obtaining an EP, as they were classified as related to categories III or IV.
2. The BAT Handbook for oil and gas production was approved with the RoK Government Resolution, on the basis of which the project documentation is required to be developed for obtaining an Integrated Environmental Permit (IEP).
3. Amendments have been made to the Rules for Conducting Public Hearings (PH). Major changes include the following:
   • Public hearings are allowed to be held prior to the State Environmental Expertise (SEE) and application for the Environmental Permit;
   • Public hearings can be held in a mixed format – open meetings and video conferences;
   • No public hearings are required when re-submitting an application for the State Environmental Expertise after receiving a refusal to issue an EP.

The following are under discussion:

• addition to the RoK Environmental Code on mandatory environmental audits every five years;
• the new environmental quality norms project for air, soil and physical factors, as a replacement to existing sanitary-hygiene norms (MPC);
• project of a new Water Code with regards to organization of the new RoK Ministry of Water Resources and Irrigation.

Environmental Public Hearings

In 2023, the Company held public hearings on materials of an inquiry for obtaining Environmental Impact Permit:

• For KPO facilities located at the Karachaganak Field for 2024. According to the RoK Environmental Code, the public hearings were held on 8-9 October 2023by means of open meetings in 4 rural districts of the Burlin region (Uspenovskiy, Priuralnyi, Zharsuatsky, Pugachevsky). For public consideration there were presented 84 construction projects, three emission ratio design projects, Waste Management programme, Industrial Control programme, Environmental Protection Plan.
• Public hearings for the KPC – Bolshoi Chagan – Atyrau export pipeline facilities located in the West Kazakhstan Oblast for 2024–2030 held on 8 November 2023 by the means of open meetings in the Kushum rural district of the Baiterek region (Bolshoi Chagan village). One construction project, two emission ratio design projects, Waste Management Programme, Industrial Control Programme, Environmental Protection Plan were presented for the public review.
• Public hearings for facilities of the KPC – Bolshoi Chagan – Atyrau export pipeline located in the Atyrau oblast for 2024–2030 were held on 22nd November 2023 as open meetings in the Makhambet rural district (Beibarys village). Two construction projects, two emission ratio design projects, Waste Management Programme, Industrial Control Programme, Environmental Protection Plan were presented for the public consideration.

Information about the planned public hearings was brought for attention of the state authorities and the public through announcements at the Unified Environmental Portal, in a periodical printed publication (newspaper), TV channel and on bulletin boards of local executive authorities of administrative-territorial units.

All projects submitted for discussion at the public hearings in 2023 were endorsed by the state authorities and the public. The results of public hearings were reflected in the protocols of public hearings. A package of documents submitted for the public hearings, including the discussion results, are available on the website https://ecoportal.kz/.

Supplier environmental assessment

Based on the RoK Environmental Code, KPO as an operator of the Karachaganak Oil Gas Condensate Field and the condensate export pipeline of KPC-Bolshoi Chagan-Atyrau is obliged to obtail an Environmental Impact Permit, which also includes contractors engaged to perform works and to provide services on the territory of KPO facilities. Contractor organisations are obliged to comply with the terms of the Environmental Impact Permit and also bear responsibility for any non-compliance as per the RoK laws.

Thus, since 2021, KPO has been continuously working to improve its engagement with suppliers. In the period from 2021 to 2022, the Contractors’ control system has been implemented and further developed in 2023.

CONTRACTOR ORGANISATIONS ARE OBLIGED TO COMPLY WITH THE TERMS OF THE ENVIRONMENTAL IMPACT PERMIT AND ALSO BEAR RESPONSIBILITY FOR ANY NON-COMPLIANCE AS PER THE ROK LEGISLATION.

In 2023, the Company’s HSE requirements reflected in Schedule D of contracts were revised. This has allowed proceeding with amendments to existing contracts upon which a number of suppliers are to independently manage wastes generated by them on the territory of the KPO facilities. Subsequently, all suppliers performing works at KPO facilities shall handle safe storage of waste at workplaces. While KPO will handle further collection and transportation of waste involving a specialized contractor.

In 2023, KPO has implemented a practice of limited-scope audits of contractors by means of the KPO Environmental Controllership in order to check their compliance with terms of the KPO Environmental Permit. As a result of the audits, accounting systems for fuel consumption at stationary emission sources and contractor waste flows were improved. In 2024, internal environmental control system during works or operational environmental control is subject to the audits.

On 22^nd December 2023, as part of raising the environmental awareness, improving the Environment Management System and fulfilling requirements of the contracts’ Schedule D, KPO held a workshop on familiarization with requirements of the new RoK Environmental Code for the contractors’ environmental specialists. The workshop was attended by representatives of the 57 contractor organisations. The workshop provided attendees with detailed requirements of the new RoK Environmental Code, as well withbetter understanding of the Operator and contractors’ responsibilities on the environmental protection.

Environmental Protective Measures Plan for 2023

To achieve the goals set in environmental protection, KPO annually develops an Environmental Protective Measures Plans (hereinafter referred as EPMP). The Plan’s measures focus on ensuring the environmental safety, improving environmental protection methods and technologies, ensuring rational use of nature and maintaining compliance with the ISO 14001 and ISO 50001 international standards.

In 2023 KPO operated the business on the basis of the environmental permits issued. The EPMPs were developed and approved for each of the Permits obtained.

Tab. 27.KPO Environmental Protective Measures Plans 2023 and Environmental Impact Permits issued

In 2023, the total actual costs of the environmental measures implemented at Karachaganak Field amounted to KZT 1.8 bln against KZT 1.5 bln planned and that is 118 %.

The 2023 KPO EPMP implementation by sections is shown in Table 28.

Tab. 28.2023 Environmental Protective Measures Plan Progress, %

The environmental effect from the implementation of environmental protection measures is presented in Table 29.

Tab. 29.Environmental effect from the implementation of environmental protection measures to reduce emissions and waste, 2023

Environmental monitoring

KPO implements a number of environmental protection programmes that include all aspects of operational activities. One of the key programmes is a Production Environmental Control (PEC) Programme developed in line with the RoK Environmental Code to meet the following objectives:

• obtaining reliable data about the Company’s emissions and impact of production activities on the environment;
• rapid and proactive response to emergencies;
• minimizing the impact on the environment and human health;
• communication with stakeholders (local communities, state regulatory authorities, partner companies) about the environmental activities of the Company and risks for population health.

As part of the PEC Programme, the environmental emissions such as air emissions, wastewater discharge, waste treatment, wastes accumulation and disposal, and the quality of environmental components such as air, surface and ground water, and soil are monitored.

In 2023, the PEC monitoring of the environment components has demonstrated that concentrations of target substances were on a par with those observed in previous years. No negative impact on the environment from the Karachaganak Field operations was identified.

KPO regularly keeps the production environmental control over the environmental condition at the Field’s waste disposal facilities. In 2023, no direct negative impact on the environmental components has been revealed as a result of monitoring of the ground water and soil at the Eco Centre’s Solid Industrial Waste Burial Landfill and the Temporary Liquid Drilling Waste Storage Site, as well as in сells 35A and 35B. Quantitative control over the movement of waste is carried out in order to take into account the volume of burial, as well as the volumes and time of waste accumulation.

Air quality is monitored by ways of collecting and testing the samples. The job is performed by an accredited laboratory, as well as 18 stationary automatic EMSs. To assess the quality of atmospheric air, sanitary and hygienic standards are used – maximum permissible concentrations (MPC). To determine the level of atmospheric air pollution, the registered concentrations of monitored components are compared with MPC and demonstrated in fractions.

In 2023, over 100 thous. samples were taken by the laboratory during the process, about 115 thous. laboratory sample analyses and some 28 thous, measurements were conducted.

The Company pays special attention to protection of atmospheric air in the Field area, at the SPZ boundaries and in settlements adjacent to the Karachaganak Field.

Sanitary Protection Zone

The current estimated Sanitary Protection Zone (SPZ) at the Karachaganak Oil Gas Condensate Field is valid from January 1, 2018. In 2021, KPO successfully completed the relocation of environmental air monitoring stations commenced in 2018. The relocation of these stations was performed due to the change of the Sanitary Protection Zone to ensure correct performance of the continuous air monitoring and to comply with the RoK legal requirements. The plot map of the Karachaganak field with SPZ marked, as of end 2023 is available for viewing on the KPO website in the section Sustainability/Environmental monitoring/Sanitary protection zone.

In 2023, KPO has continued the implementation of the Project “Organization and improvement of the estimated KOGCF Sanitary Protection Zone”, having completed “The first phase of planting the KOGCF SPZ and extending the SPZ boundaries”. The aim of the Project is to take care of existing forest stands and to plant new trees, as well as to install signages at the SPZ boundaries.

In order to protect historical and cultural heritage sites from potential negative impact, the Project also provides for the installation of relevant signages at the boundaries of the protected heritage sites. Earlier in 2019, KPO organized the large-scale archaeological research on this topic (see the details in the KPO Sustainability Report 2019, pp. 85-88).

In 2023, the boundaries of the Sanitary Protection Zone were expanded, including the installation of signages and boundaries of protective zones of historical and cultural heritage sites.

Total area of plots planned for the tree planting for the entire project period will be 249.1 hectares including the 151.9 hectare area to create new forest belts, and the 97.2 hectares is the area of reconstruction work on existing plantations.

Total implementation period for the entire project includes the period from spring 2023 up to 2028:

• 2022 – surveys, field work, development of project documentation.
• 2023 – drawing the SPZ boundaries.
• 2024 – installation of signages at the boundaries of protected historical sites.
• 2023–2026 – renovation of forest belts.
• 2025–2028 – planting of new forest belts.

Construction of capital facilities in the process of this Project implementation is not foreseen. The work is carried out by a contractor. Plot map “The main design solutions for arrangement and improvement of the Karachaganak Oil Gas Condensate Field’s Sanitory Protection Zone for the period 2023–2028” is available on the KPO website in the section Sustainability/Environmental monitoring/Sanitary protection zone. The consolidated plot plans for placement of the SPZ facilities and landscaping were agreed by involved stakeholders, business organizations and agricultural producers.

Atmospheric Air Monitoring by Environmental Monitoring Stations

18 stationary automatic Environmental Monitoring Stations are installed along the perimeter of the KOGCF and the SPZ (EMSs 001 – 018) and integrated into a single automatic environmental monitoring system.

Four out of 18 EMSs are located in the Field and within the SPZ. As of end 2023, 13 EMSs are based at the SPZ boundares: 006 – 018 EMSs; EMS 005 is located near the Aksai city.

Annual average concentrations of the monitored components recorded by EMSs in 2023 at the KOGCF SPZ boundary are shown in Table 30. The column “Actual annual average concentration” shows the minimum and maximum annual average concentrations of the monitored components recorded by each EMS.

Tab. 30.Annual average concentrations of the monitored components recorded by EMS in 2023

All the EMSs take measurements of the four main pollutants (H₂S, SO₂, NO₂, CO) on a continuous basis, i.e., 24/7.

According to the data received from EMSs in 2023, the actual daily, monthly, quarterly and annual average concentrations of the monitored components did not exceed the established sanitary and hygienic limits. While, during the year 177 cases of one-time 20-minute exceedance in H₂S concentration and one case of CO₂ exceedance were recorded.

Pursuant to the requirement of the RoK Environmental Code (Sub-it. 8, It. 2, Article 184), KPO delivered notices regarding the exceedance recorded at the EMS-017 and the EMS-007 to the WKO Environmental Department.

It should be noted that no connection was found between the exceedance shown in Table 31 and the operations of the KPO field facilities. At the times of the exceedance, all KPO facilities were functioning in normal operation mode, no well flaring or clean-ups were performed. There were no malfunctions of process equipment, leaks or unauthorized emissions, emergency or scheduled shutdowns of the process. No direct H₂S sources were revealed at the KPO facilities.

Tab. 31. One-time MPC exceedances recorded by EMS in 2023

No gas odour complaints from the local communities adjacent to the Karachaganak Field were raised on the date the MPC exceedances were recorded.

Air quality data from all 18 KPO automatic EMSs are transmitted online to the West Kazakhstan Oblast Environmental Department via the Ecomonitor portal.

Atmospheric air monitoring in the villages adjacent to the Karachaganak Field

In six villages located along the perimeter of the field: Zharsuat, Zhanatalap, Dimitrovo, Karachaganak, Priuralnoe, Uspenovka, and in Aksai town, stationary air monitoring posts have been installed. The air sampling is carried out four (4) times a day (at 1, 7, 13 and 19 hours according to the State Standard) by the permanent personnel of the contracting laboratory, who reside in the specified villages. Approximately 52,000 air samples were collected and analysed at the stationary posts in 2023.

Air samples are chemically tested in the laboratory in Aksai for the content of five main components in accordance with the State Standard and ruling documents: hydrogen sulphide (H₂S), sulphur dioxide (SO₂), nitrogen dioxide (NO₂), carbon oxide/monoxide (CO), and methyl mercaptan (СH₃SH). In addition, every 10 days the air is monitored for the concentration of volatile organic components: benzene (C6H6), toluene (C₇H₈), xylene (C₈H₁₀).

Monthly results of air monitoring are published in local print media and distributed to the villages for posting on the information boards, as well as published on the KPO web-site on a monthly basis. If any gas odour complaint is raised by someone of the community, an unscheduled air sampling is performed at the stationary posts.

In 2023, no MPC exceedances were recorded for the daily average concentrations of the monitored air components in the villages.

In 2023, 19 complaints with respect to gas odour were raised by the villagers living in proximity of the Karachaganak Field. The unscheduled air sampling was carried out in the villages, the analysis results of which showed that the concentrations of the monitored components did not exceed the established MPC one-time. Each complaint from an initiator with respect to gas odour was addressed.

The annual average concentrations of the monitored air components in the seven villages in 2023 are shown in Table 32. The column “Actual annual average concentration” shows the minimum and maximum annual average concentrations of the monitored components. Criterion for assessing air quality in settlements is MPC daily average.

Tab. 32.Annual average concentrations of the monitored air components in the villages adjacent to the Karachaganak Field in 2023