Uzbekistan begins negotiations with Kazakhstan on gasoline imports

7 January 2019 13:00 (UTC+04:00)

By Abdul Kerimkhanov

Kazakhstan is beginning preliminary negotiations with Uzbekneftegaz on gasoline supplies from Kazakh oil refineries to Uzbekistan, Kazakh Energy Minister Kanat Bozumbayev said.

Commenting on the export potential of Kazakh gasoline, the minister noted that Kazakhstan is interested in the markets of Uzbekistan, Afghanistan and Tajikistan.

To prevent overstocking of the market after the modernization of three refineries in the republic, last year Kazakhstan announced its intention to launch gasoline export.

Kazakhstan and Russia signed a protocol on amendments to the agreement on interaction in the fuel and energy complex on October 2018. The amendments concerned the lifting of the embargo on the supply of Kazakh gasoline to the CIS countries.

In December, Bozumbayev also spoke about the possible export of Kazakh gasoline to Kyrgyzstan from February 2019.

As previously foreseen by Daniyar Tiyesov, deputy chairman for oil transportation, refining and marketing of the national company KazMunayGas, Kazakhstan will be able to export 1.2 million tons in 2019.

Kazakhstan has three major oil refineries - Atyrau, Shymkent and Pavlodar. All three already wrapped up their modernization programs last year.

The refining capacity of the three plants was said to increase from 13.8 to 16.5 million tons after the modernization. Production of all types of light oil products, gasoline, diesel fuel and aviation kerosene will increase. All plants will produce gasoline for 2.3 million tons more. The production of diesel fuel will increase for 917,000 tons and aviation kerosene for 539,000 tons.

The Kazakh producers already provide more than 88 percent of the demand for gasoline, while 99.9 percent is sold on the domestic market.

Kazakhstan produced 3.3 million tons of gasoline (including aviation) in January-November 2018, which is 27.3 percent more than in the same period of 2017. Due to the growth of production and import substitution policy in the sector, gasoline imports decreased by almost 52 percent over the year, to 374,500 tons. Exports increased by 34.2 percent for the year, but its volumes are expected to be insignificant - only 2,900 tons.

The highest volumes of output fell on the Pavlodar region: 36.4 percent of gasoline production (1.2 million tons) and 39 percent of diesel fuel production (1.5 million tons). As many as 32.2 percent of gasoline production and 26.3 percent of diesel fuel production was provided by Shymkent. Atyrau region provided 29.3 percent of gasoline production and 31 percent of diesel. 

Earlier it became known that a new oil refinery plant will be built in Kazakhstan. A land area of ​​100 hectares in Zhanaarkinsky district of the Karaganda region has already been allocated for the construction. The Singapore firm invested funds to build the refinery. A contract with investors from Singapore for the total amount of 300 billion tenge was signed in Karaganda in the spring of this year. According to preliminary calculations, the plant will process up to 1 million tons of oil per year.

According to the forecasts of the Energy Ministry, there will be a need to increase imports of petroleum products by 2022. By this time, the fourth plant should already be built. In 2019, it is planned to attract investors and begin construction.

---

Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94 

Follow us on Twitter @AzerNewsAz