Kazakhstan to supply about 2 million tons of oil to Uzbekistan

By Abdul Kerimkhanov

Trade and economic cooperation is the main indicator of the level of close relations between Kazakhstan and Uzbekistan. In this area, the two countries have created a solid legal and contractual base, with more than 50 interstate, intergovernmental and interdepartmental documents.

Kazakhstan has ratified a framework agreement with Uzbekistan on some issues of cooperation in the energy sector, including in the area of oil and gas supplies.

Uzbekistan will supply up to 2 million tons of oil from Kazakhstan. This is stipulated by the law on some issues of cooperation between the two countries in the energy sector, which was signed by President Kassym-Jomart Tokayev on April 2, Kazakh media reported.

President Tokayev signed the law on ratification of the relevant agreement concluded by the two governments in 2017, the press service of the head of state said.

“The agreement implementation will facilitate the supply of crude oil to Uzbekistan for refining at oil refineries and addressing the issue of uninterrupted supply of natural gas from Uzbekistan in the autumn-winter period of southern Kazakhstan,” explained Energy Minister Kanat Bozumbayev.

As Makhambet Dosmukhambetov, Acting Minister of Energy of Kazakhstan, said, the country in the future is ready to supply Uzbekistan with oil from its resources. By transshipment to rail tank cars at Shagyr station, oil will be delivered via the Kenkiyak-Kumkol pipeline. The tariff for one ton in this direction is about $ 25.

The agreement provides for the creation of a coordination council on all issues of bilateral cooperation in the energy sector.

The Uzbek side guarantees the timely completion of the construction of the oil transportation and refining infrastructure on its territory to ensure the receipt of the planned volumes of oil.

Dosmukhambetov said that the Russian side is considering the issue of oil supplies to Uzbekistan in the amount of up to 1 million tons. In this regard, Kazakhstan is considered as a transit party between the two countries.

In general, Uzbekistan plans to purchase up to five million tons per year. Of these, two million from Kazakhstan and three million tons from Russia. For a stable supply to Uzbekistan of up to five million tons of oil, significant investments in transport infrastructure are needed.

In order to meet the needs of Uzbekistan for oil, Kazakhstan delivered more than 260,000 tons of oil in 2018.

Diplomatic relations between Kazakhstan and Uzbekistan were established on November 23, 1992.

The trade turnover of Kazakhstan with Uzbekistan amounted to more than $ 2 billion in January-October 2018, which is higher by 30.9 percent than the same period of the previous year. Over 200 companies with Kazakh capital currently operate in Uzbekistan.

Earlier this year, Uzbekistan and Kazakhstan agreed to take further measures to ensure the growth of trade turnover to $ 3 billion in 2018 and $ 5 billion by 2020. The countries also intend to increase the number of rail, bus and air communication between two states.

Kazakhstan exports to Uzbekistan petroleum and their products, the milling industry, grains, ferrous and non-ferrous metals, products of inorganic chemistry, food products.

Uzbekistan exports to Kazakhstan energy sources (gas), cotton fiber, chemical products and plastics, fertilizers, fruits and vegetables and other types of goods.

Uzbek investments in Kazakhstan for the past 10 years amounted to $ 31.3 million, half of which falls for 2016. Kazakh investments in Uzbekistan totalled $ 114.4 million in the past decade.

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

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