A solution to such an important for Kazakhstan ecological problem as disposal of waste sulfur depends directly on the world prices for grain. According to specialists, block sulfur deposits that have formed as a result of aggressive oil extraction in Kazakhstan have reached 18.5 million tons. Stored under the open sky, they cause a serious ecological problem during the rainy seasons in the western parts of the republic. At present, there is no scientific way to effectively utilize the sulfur.
However, there is hope that, by carving its way to the markets of the neighboring China and India, Kazakhstan's grain may help solve this problem, Associate Professor of the Gubkin State University of Oil and Gas, Doctor of Science Leonid Bagdasarov, said.
Practically all of the oil and gas deposits in Kazakhstan have high sulfur contents. In processing of oil and gas, sulfur is separated and stored. With the ever growing volumes of oil production in Kazakhstan, the deposits of this oil and gas industry's by-product in the republic are nearing 20 million tons. This problem is especially acute at Kazakhstan's most productive and flowing field, Tengiz, where huge mountains of block sulfur have now grown.
The ecologists of Kazakhstan have more than once raised the issue of liquidation of the sulfur deposits. "Three years ago, TengizChevroil had accumulated over eight tons of sulfur. And this number is not decreasing. At the same time, this sulfur is stored under the open sky. After a rain, it spills all over the ground, gets into the water, contaminating them", - a deputy of the Majilis (lower chamber of the Parliament) Aitkul Samakova said. She pointed out that four years earlier the Ministry of Environmental Protection had demanded from TCO to start processing the sulfur.
According to the information of the Ministry of Oil and Gas, TCO consortium – the developer of the Tengiz field – removed and sold 2.3 million tons of sulfur in 2008. However, the deposits of sulfur are not decreasing, as the volumes of oil production continue to grow contributing to the growing sulfur mountains. Soon, oil production at Tengiz will reach 24 million tons a year increasing the sulfur deposits accordingly.
There have been numerous reports that TCO has undertaken to completely liquidate all sulfur deposits in the vicinity of the field by 2017. Today, liquidation or utilization of sulfur is a top priority problem for many refineries world-wide.
It is a serious headache for the neighboring Russia, where the refining industry produces 11 million tons of sulfur annually. For example, Russian gas monopoly Gazprom-owned Orenburg refinery produces up to half a million tons of sulfur annually. Another Gazprom-owned refinery, Astrakhan, ends up with five million tons of sulfur annually. Just like at Tengiz, mountains of sulfur have formed near the Russian city of Norilsk.
Bagdasarov said that tough measures have been introduced in his country: a license for development of any oil or gas field can only be granted if the applicant provides a comprehensive sulfur utilization and disposal program. For instance, in the Astrakhan region, in the flood-plain of Russia's major river Volga, new oil fields have been found. They could produce up to 21 million tons of oil annually. However, it will also mean seven million tons of sulfur a year. "Who would ever allow storing sulfur in the flood-plain of Volga where there is caviar, sturgeon? So these fields remain untouched," Bagdasarov said.
Things are not any better in the other parts of the world. In the US, at the northern coast of the Atlantic Ocean, there is a gigantic accumulation of sulfur. World-wide, oil and gas processing industry produces almost 51 million tons of sulfur annually. "Alas, neither the Russian, nor the Japanese, nor the American scientists who rack their brains to find a new technology to utilize sulfur, for example, in road paving industry, have invented anything so far," Bagdasarov said.
He said that these days you can't find buyers for sulfur for the love of money. The reason for that is that there is no good resale market for sulfur today. But there is still a certain hope. "Incredible as it may sound, a solution to such an important for not just Kazakhstan but for many other countries ecological problem as disposal of waste sulfur depends directly on the world prices for grain," Bagdasarov added. He pointed out that when a couple of years back the US announced that it would make gas of wheat and corn, the world's grain market reacted immediately. "The price for a ton of wheat soared to 420 dollars at that time, which was very good for Kazakhstan, considering its expanses of crops. Simultaneously, the price for sulfur grew from 10 dollars to 650 dollars per ton," the Russian expert said. The specialists referred to that situation with the growing demand for sulfur as "short madness." "The reason for such a sudden sulfur rush is that, together with phosphorus materials, it makes a good component for excellent phosphate fertilizers that increase the yield to 10 centers of grain per hectare," Bagdasarov explained.
However, the fashion for production of "green gas" quickly passed, and the price for wheat dropped back within three months, dragging down the demand for sulfur. "Currently, the world prices for wheat stay at the level of $100 per ton making it uneconomical for the producers of phosphate fertilizers to purchase, transport and process sulfur to get a ton of fertilizer. Too much hassle for a hundred dollars. But if the price for grain were $420, it would, undoubtedly, make it worthwhile, Bagdasarov said.
"If the neighboring China or India, and they are huge markets, eat more bread from your grain, it will lead to the growth of prices for your merchandise. And there is a hope that buyers would come running to us to purchase our unwanted by-product of oil processing," he said.
In the meantime, though, Kazakhstan, with its vast territory, will have to store sulfur under the open sky and to wait for better times. "Therefore, the sulfur market is in direct relationship with the grain market. Presently, there is no way of using the sulfur other than in fertilizers," Bagdasarov said.
As far as exports of our grain to China are concerned, Kazakhstan has just started them for the first time this year. According to the information of Daulet Uvashev, Managing Director, Commercial, of the national company Prodkorporatzia, the company has so far delivered 20,000 tons of grain to China (with a yield of 20 million tons). The plan is to deliver another 30,000 tons by the end of this year. "Of course, the volumes are not large, but it is because the Chinese market still tastes our merchandize, evaluating its qualities. It was exactly like this when we had just entered the Iranian market," Uvashev said.
