Kazakhstan to be independent of fluctuations in raw material prices by 2023-2025

By Vusala Abbasova

Kazakhstan’s internal market will be fully supplied with domestic fuels and lubricants by 2023-2025 as a result of a broad initiative to renovate and modernize all three major oil refineries that exist in the country.

The project will increase the number of processing units at the Pavlodar, Shymkent, and Atyrau refineries and make it possible to increase technological complexity, according to KMG Processing and Marketing Company.

Within the project, the number of processing units at the Atyrau refinery will be increased from 10 to 20, from 9 to 15 at the Shymkent refinery, and from 13 to 16 at the Pavlodar petrochemical plant.

Furthermore, the modernization will make it possible to increase the refineries' technological complexity -- characterized by the Nelson index -- increasing the average value from 5.4 to 9.5 points.

As results, it will increase the production of high-octane gasoline by 71.5 percent, while diesel fuel will be produced at a volume of 4,891 tons per annum, which is 16.5 percent more than in 2014. The production of aviation fuel will more than double.

The modernization project was initially planned to be completed in 2016, but the KMG Processing and Marketing Company reported that the work may be delayed.

All Kazakh oil refineries continue to operate as normal during the period of modernization and reconstruction.

The Shymkent oil refinery has already started producing diesel fuel that meets K4 and K5 environmental class standards under a large project to renovate and modernize the refinery.

These measures have greatly improved the quality and environmental features of diesel fuel, significantly reducing its sulfur content and freezing temperature.

The production of diesel fuel with improved environmental characteristics is a real step toward reducing emissions from automobile and railway transportation and bringing an ecological component to the motor fuel produced in Kazakhstan in line with international standards.

The construction of new oil refineries and the renovation of existing ones will help alleviate Kazakhstan’s fuels and lubricants shortage.

The Atyrau plant has been operating since 1945. The plant’s processed oil products totaled 4,920,005 tons in 2014, while Pavlodar and Shymkent’s output totaled 4,925,774 and 5,085,239, respectively.

Currently, these refineries are responsible for only 60 percent of the country's fuel consumption. The other 40 percent comes from abroad, mainly from Russia.

Only after domestic refineries are modernized will it become possible for Kazakhstan to fully cover its domestic fuel needs.

Therefore, the country announced its plans for the construction of a new, fourth refinery in the Mangistau region jointly with Iran on July 15.

The new oil refinery will process 10 million tons of oil products and will create 10,000 jobs.

A feasibility study for the construction of the fourth refinery should be completed in the near future and a relevant agreement for the construction of the refinery will be signed by the end of the year.

The approximate minimum amount of investment in the construction of the project is estimated at $6 billion.

Recently, Kazakh President Nursultan Nazarbayev said that the construction of the new oil refinery would make the county independent of fluctuations in the prices of raw materials.

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