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Project summary document

Project name:Bautino II
Country:Kazakhstan
Project number:38662
Business sector:Natural resources
Public/Private:Private
Environmental category:B
Board date:8 July 2008
Status:Signed
Date PSD disclosed:
Date PSD updated:
4 February 2008
1 July 2008
Local language translation:Перевод на русский 
Date translation disclosed:28 February 2008
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Project description
and objectives:

The Project entails the construction of a vessel maintenance facility at the Bautino Atash Marine and Supply Base (under construction and financed by EBRD). The facility will primarily serve vessels engaged in oil & gas exploration. This infrastructure would provide much needed support to the off-shore oil and gas development in the North Caspian Sea and constitutes the first of its kind on the Kazakh coast.

Transition impact:

The Project contributes to enhancing further the transition impact of the Bautino Atash Marine and Supply Base Project and, in particular, adds strong elements of transfer and dispersion of skills through the recruitment and training of local workforce; of demonstration of new replicable behaviours and activities through the creation of the first quality vessel maintenance facility in Kazakhstan; and of setting standards of business conduct in terms of environmental and health & safety standards.

The client:

A joint venture to be established between Nico International Ltd (50%), Balykshi LLP (20%) and JSC NMSC Kazmortransflot (30%).

EBRD finance:

USD 10.3 million Senior Secured Loan.

Total project cost:

The construction of the Vessel Maintenance Facility is expected to cost a total of USD 14.75 million. This is in addition to the USD 80.51 million budgeted for the Bautino Atash Marine and Supply Base Project.

Environmental impact:

1. Screening category and justification

Screened B/1. The construction and operation of a vessel maintenance facility, which will serve only light vessels upto 600 tonnes is likely to result in limited adverse environmental impacts. Those potential impacts have been identified and assessed through an Environmental Analysis and mitigation measures have been developed. The environmental status and performance of the Bautino Support Base have also been audited as part of the due diligence.

2. Due Diligence undertaken, outcomes and residual risks

An environmental analysis has been carried out to assess environmental and social benefits and impacts of the project and to make recommendations for mitigation measures. Also an environmental audit has been carried out to identify issues associated with existing activities at the project site and at the Bautino Support Base. The outcomes of the due diligence can be summarised as follows:

Baseline conditions
The air quality monitoring results indicate that dust concentration, nitric oxide and hydrocarbons exceed the standards especially during the period of intensive activities for offshore operation support. However, 3-days monitoring of air quality around the construction activities at the Atash Base showed no exceeds.

The sea water quality in the Tyub-Karagan Bay water is mainly affected by a combination of natural processes but also by occasional accidental spills and domestic sewage seepage. Monitoring results indicate elevated levels of phenols (mainly of natural origin) and total dissolved nitrogen but also presence of e-coli in the sea water. In Tyub-Karagan Bay, the elevated levels of hydrocarbons has been found in the sediments at the port Bautino. In sediments at the Yard aquatory contaminants were found in concentrations well below the maximum permitted.

The regional groundwater quality monitoring results show that the potable water standards are exceeded for 6 parameters. However, in comparison with the results for the previous years' surveys, there is a clear pollution reduction trend. The analyses of the drinking water from the three artesian wells of Ketyk showed no metals and petroleum hydrocarbons in the water. However, the regular analyses by the Sanitary-Epidemiological Station qualify this water as not suitable for consumption mainly based on its excessive salinity.

Monitoring of baseline conditions have started before the project was initiated. The results of the analysis carried out during the first quarter of 2008 (after the Base construction started) show no abnormalities over baseline or maximum permitted emissions. The results are available in Russian at www.ecocentre.kz.

All current activities of the Base are carried out in accordance with the Kazakh regulations as well as EBRD Policy requirements.

Impacts resulting from construction
Impact from construction on sea water quality will mainly relate to increased concentration of suspended solids during the installation of finger pier pylons. The impacts will be very short term and at the area of low ecological value as the result of dredging. No elevation of concentration of hazardous substances in the seawater is expected as a result of sediment suspension. Installation of the finger piers piles will introduce minor disturbance to sea sediment which are already disturbed by dredging sediments. The potential impacts of the project on terrestrial and marine flora and fauna will be insignificant. Air emissions from diesel combustion and paint works will be of low significance. The Yard will be set within the other facilities of the Base and will have no components that differ visually from the other Base components.

Impacts Resulting from operation
No impact is expected from normal operation on soil, sea water or groundwater quality. Sea sediments and marine vegetation will not be disturbed during normal operation of the Yard. With zero discharge, marine animals will not be affected by the Yard normal operation and decommissioning. The impact from the Base on terrestrial vegetation was evaluated as having low significance. There will be no negative impact on terrestrial animals. The calculations of pollutants volumes and their dispersion modelling show that that the operation emissions will not significantly affect the local air and the pollutants concentrations at the face of the nearest residential property.

Cumulative impacts
Although the Yard was not evaluated as causing any immediate impact above low significance (mainly due to its size and the operation mode), with perspective of the other bases development next to the Atash Base, impact on seawater and marine plants and invertebrates as well as the level for risk of accidents at sea is evaluated to have moderate significance level. This is mainly because the assessment of cumulative impact bears the greatest degree of uncertainty and the worst case scenario has to be accepted to comply with the 'Precautionary Principle'. Therefore monitoring these environmental media and the effectiveness of the Bay navigation system is likely to be the most appropriate mitigation measure to detect and, if necessary, mitigate the impacts to an acceptable level.

3. Implementation requirements

Waste management
The Yard waste will be disposed in close containers at the workshops, then accumulated at the Atash Base waste depot and moved to a waste transfer contractor to specified sites. All hazardous and non-hazardous waste will be disposed off in the waste disposal site of Tennis Services Waste LLP. Sewage will be regularly transferred to the Municipal Sewage Treatment Plant. To ensure that the delivered waste is properly handled, the Atash Base Operator will regularly audit the disposal facilities.

Emergency response
Increase of vessel collision risk in the Bay due to addition of the marine traffic will not be significant. Balykshi LLP has prepared an Emergency Response Plan which includes the Oil Spill Response Plan and addresses incident reporting, agreements with the other Bay operators to share the spill response capabilities, contractor databases, etc. The plan contains all necessary contact details for appropriate logistical support, together with pertinent contact details for relevant bodies for responses to the different tier events. The plan also includes an assessment of the adequacy of available response equipment and mobilisation effort required for the leak scenarios identified in the risk assessment.

Environmental Management
The Health, Safety and Environmental Management System (HSEMS), which has been created for the Atash Base construction phase in accordance with ISO 14001, is being updated to incorporate aspects of the Boat Yard. At the operation stage the Base operation HSEMS will be bridged with the MOBY HSEMS in order to ensure continuity. Environmental management follows a hierarchical structure that is reflected in ISO14001.

Monitoring
A monitoring plan for construction and operational phases has been prepared covering the monitoring requirements for fish resources, plankton, aquatic vegetation, and animals, seawater quality, seabed sediments, air, soils, ground vegetation, fauna, and groundwater.

Technical
cooperation:

None.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

tba.

EBRD contact:

Matteo Colangeli, Operation Leader: colangem@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com


Project Summary Documents are created before consideration by the EBRD Board of Directors. Details of a project may change following disclosure of a Project Summary Document. Project Summary Documents cannot be considered to represent official EBRD policy.
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