Kazakhstan has ended its agreement with energy companies Shell plc and Eni S.p.A. to build a gas processing plant at one of the country’s biggest oil and gas fields.

The project is located at the Karachaganak field, a massive energy site in western Kazakhstan that ranks among the world’s largest gas-condensate reserves.

Authorities said the deal was canceled due to rising costs, poor economic returns, and ongoing disagreements with the companies over project conditions. The government has now taken over responsibility for completing the facility, saying the move is necessary to protect national energy security.

The planned plant will process up to 4 billion cubic meters of gas annually once completed. For now, gas from the field is sent to a processing facility in Orenburg, Russia. Disruptions there last year forced Kazakhstan to cut production, exposing the risks of relying on infrastructure outside its borders.

The decision also comes amid a broader dispute between Kazakhstan and the Shell-Eni consortium over revenue sharing and costs. The group recently lost an arbitration case and could face a multi-billion-dollar payout if the ruling is upheld.

By taking control of the project, Kazakhstan is looking to gain more control over its energy production and reduce dependence on foreign processing facilities.