Chevron Corporation announced today that its affiliate Tengizchevroil LLP has started up new facilities as part of the first phase of its expansion at the Tengiz Field in Kazakhstan.

This initial expansion of 90,000 barrels per day brings Tengizchevroil’s current capacity to a total of approximately 400,000 barrels per day. Included in the startup is the Sour Gas Injection (SGI) project and the front end of the Second Generation Plant (SGP). SGI reinjects produced sour gas into the reservoir at very high pressures to boost production. SGP was brought up to about one-third of its full capacity and is currently separating the natural gas for injection while also stabilizing and sweetening the crude oil. Once fully operational, SGP is designed to also process sour gas into gas products and elemental sulfur.

The addition of full facilities is projected to further increase daily crude production capacity at Tengiz to 540,000 barrels. Start-up of full facilities is expected during the second half of 2008.

“The successful startup of the first phase of the expansion is a state-of-the-art technological achievement and a demonstration of our ability to execute next-generation, highly complex projects,” said Guy Hollingsworth, president of Chevron Europe, Eurasia and Middle East Exploration and Production. Once at full operating capacity, approximately one-third of the sour gas produced from the expansion is planned to be injected into the reservoir. The remaining volumes will be processed as commercial gas, propane, butane and sulfur.

“This multibillion-dollar SGI/SGP expansion of the world’s deepest producing supergiant oil field is another step forward in partnering with Kazakhstan to develop the full potential of the country’s vast energy resources,” said Jay Johnson, managing director of Chevron’s Eurasia business unit. “We will continue to grow and modernize the country’s energy sector and generate economic prosperity.” Chevron has a 50 percent interest in Tengizchevroil. Other partners are KazMunaiGas, 20 percent; ExxonMobil Kazakhstan Ventures Inc., 25 percent; and LUKArco, 5 percent.