MOSCOW, Jan 24 (Reuters) - Kazakhstan's biggest oil

producer Chevron ( CVX )-led Tengizchevroil (TCO) said on Friday

it had initiated oil production at its new third-generation

plant (3GP) at the Tengiz oilfield.

"This milestone marks the beginning of a gradual ramp-up of

3GP production over the coming months, which is expected to

expand Tengiz's crude oil output by an additional 12 million

tons per annum," Tengizchevroil said in statement.

"Once all Tengiz facilities are operating at full capacity,

TCO's total annual crude oil production is expected to reach

approximately 40 million tons per annum, providing incremental

value to Kazakhstan through taxes, royalties and other direct

financial payments."

(Reporting by Reuters)