Kazakhstan Plans To Initiate Agreement Cancellation With Russian Banning Export Of Oil Products From Kazakhstan

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Kazakhstan plans to initiate cancellation of the agreement with Russia banning export of oil products from Kazakhstan, said Kanat Bozumbayev, Minister of Energy of Russia.

“We have an agreement with the Russian Federation that Kazakhstan will not export light oil products. It is connected with duty free import until today, we consume Russian petrol and Russian diesel fuel. If two refineries give products in November, in December we will consider and in January we will initiate cancellation of this agreement,” he said.

“It will be our petrol, our diesel fuel, we will have excess 1.2-2 mln tons on each type of fuel. We will launch export, so that plants could work and get profit from exported oil products, to repay the loans attracted for modernization. We plan to change the agreement on export of light oil products,” he concluded.

Bozumbayev told reporters the government planned to initiate talks with Russia about lifting the ban from January 2018 as that would help refineries repay “loans taken out to finance costly upgrades”.

Kazakhstan has three main oil refineries and after the upgrades they could boost output of gasoline and diesel fuel to a level exceeding domestic demand by 1.5-2.0 million tonnes a year for each product, Bozumbayev said.

The Atyray and Pavlodar refineries plan to complete equipment upgrades in the second half of this year, while the Shymkent refinery aims to finish upgrades next year.

Kazakhstan imported 609,000 tonnes of gasoline from Russia by rail in January-July this year, down from 640,000 tonnes a year earlier. However, the Central Asian nation also imported 168,000 tonnes of diesel fuel and 179,000 tonnes of airplane fuel from Russia, up from 81,000 tonnes and 112,000 tonnes respectively.