When will the “gasoline paradise” come?

March 05. Kazpravda


When will the “gasoline paradise” come?After commissioning of the fourth refinery, Kazakhstan will stop importing high-octane fuel and will even be able to export its oil to southern neighbors: Uzbekistan, Tajikistan, Kyrgyzstan and Afghanistan. However, the country will have to compete in these markets with Russia, said yesterday head of JSC NC KazMunaiGas Sayat Mynbayev at the briefing in Astana.

Rise of prices for gasoline, measures taken by the national company KazMunaiGas to eliminate chronic fuel shortages, impact on budget from delay of production at the Kashagan field and other topical issues were in the focus at the briefing with chairman of the national company KazMunaiGas (KMG) Sauat Mynbayev held on 4 March in the Service of central communications under the President.

From importer to exporter

Being an oil-producing country Kazakhstan still remains in a paradoxical situation: it has to import high-octane fuel, which with increasing number of car owners became very popular, at high prices.

There are several reasons for that, which recently have been talked of a lot. First of all, all three existing refineries in the republic are technologically outdated and can not produce sufficient high-octane gasoline. Then, the state program for modernization of these companies clearly lags behind the growing needs of domestic market. Today, according to official figures Kazakhstan imports 1.6 million tons of light oil.

– Upon completion of the modernization program, i.e. in the second half of 2016, the capacity of the Pavlodar refinery will rise to 7 million tons; Shymkent processing plant – to 6 million; the Atyrau oil refinery – up to 5 million. From that moment the needs of domestic market will be closed at 100% – said Mynbayev.

But from 2022 the total capacity of these refineries will not be able to satisfy the needs of Kazakh consumers. The fourth oil-processing plant can improve the situation. And as assured the head of KMG EP, with its construction Kazakhstan can turn from importer of light oil to its exporter.

– It is inexpedient to build a plant with processing capacity of less than 5.6 million tons of crude oil per year. At this scenario, we will have to export the lions’ share of the products of the fourth plant, he said, and – in this case we will face the problem of potential sales markets for Kazakh gasoline.

– Export to neighboring Russia is hardly possible because they produce this fuel in abundance. Chinese plants are also competitive enough. Access to the western markets is complicated by logistics. And if we choose the routes across the Caspian Sea, there is Azerbaijan which has its own refining capacities, – said the head of KMG.

In his opinion, the most attractive export markets for Kazakh fuel in a southern direction are Uzbekistan, Tajikistan, Kyrgyzstan and Afghanistan.

– Our specialists together with the ministry of oil and gas started thorough calculations and discussions of all details of this project. Now it is difficult to say where the future plant will be placed and how much it will cost, – said Mynbayev.

The fourth refinery

Two years ago the problem of fuel shortages in the domestic market was planned to be resolved through tolling operations of oil refining with China. KazMunaiGas was going to supply to their border factories around 1.5 million tons of crude oil to receive from this volume the wanted amount of petroleum products.

But, as the head of the national company noted, the step which was relevant two years ago, today has lost its expediency.

After our agreements with Russia reached in late 2013 on duty-free import of goods, I do not see economic basis for tolling operations. This year the tolling will be carried out still on inertia, but in small quantities. I think that with time, this scheme will come to naught – he continued.

According to Mynbayev, for Kazakhstan it is easier to import duty-free volumes of light oil products from Russia.

As for prices for fuel, he said it is the prerogative of the antimonopoly agency and, accordingly, the questions about them should be addressed to its authorities.

Kashagan and the probability theory

As known, in October last year oil production at the most promising project was suspended for the leak in the pipeline. Some foreign media reported on the probability of replacing the entire problem system which entails billions of new investments.

Mynbayev said that he can not give an exact answer, because the final expert conclusion about the causes of the accident has not been made yet.

– We expect to receive the final conclusion from experts by the end of this month and therefore it is early to speak about the amount of expenses associated with full replacement or repair of the pipeline – he added.

The head of the national company was also cautious about determining the time of resumption of production at the Kashagan, although a day earlier Minister of Economy and Budget Planning Erbolat Dossaev said that the republic planned to receive in the second half of they year 2.5 million tons of crude oil from the Kashagan deposit.

– I will refrain from commenting, because the talk about resumption of oil production at the Kashagan field in the second half of the current year, should be continued in the combination with the word “probably” – summed Mynbayev.