Kazakhstan Business & Economy - The Times Of Central Asia

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Transit of Russian Gas to Uzbekistan Through Kazakhstan Continues to Grow

The volume of Russian natural gas transiting through Kazakhstan to Uzbekistan is on the rise, reflecting deepening regional energy cooperation. Kazakhstan’s Deputy Minister of Energy, Alibek Zhamauov, shared the update during a speech at the international Energy Trends forum, according to Interfax. Gas transit to Uzbekistan via Kazakhstan began in October 2023. In 2024, 5.6 billion cubic meters of Russian gas were delivered through Kazakhstan, surpassing earlier forecasts of 3.8 billion cubic meters. The volume is projected to increase to 7.3 billion cubic meters in 2025, with further plans to reach 11 billion cubic meters per year starting in 2026. The growing volumes highlight Kazakhstan’s emerging role as a vital transit hub for Central Asia. In 2023, the initial year of operation, 1.28 billion cubic meters of gas were transported along this route. Zhamauov stated that the project is part of a broader strategy to enhance regional energy security and develop cross-border gas infrastructure. Kazakhstan’s Ministry of Energy has committed to expanding and upgrading the country’s gas transportation network to accommodate long-term supply agreements with neighboring states. Uzbekistan’s Production Decline Raises Concerns The rising reliance on imported gas comes amid a continued decline in Uzbekistan’s domestic natural gas production. In the first two months of 2025, output fell by 4.2% compared to the same period in 2024. This trend follows a steep drop in production from 61.59 billion cubic meters in 2018 to 44.59 billion in 2024. The shrinking output has sparked concerns over Uzbekistan’s energy security and its broader economic implications. The country’s increasing dependence on regional gas flows highlights the strategic importance of projects like the Russia-Kazakhstan-Uzbekistan transit corridor.

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Kazakhstan Plans 25% Gas Output Increase by 2030

Kazakhstan aims to significantly increase its natural gas production over the next five years, raising output from 59 billion cubic meters to 74 billion cubic meters by 2030. The announcement was made by Deputy Minister of Energy Alibek Zhamauov during the Energy Trends: Gas & Petrochemicals forum in Astana. Production Growth Driven by Major Fields and New Developments In 2023, Kazakhstan produced 59 billion cubic meters of gas, with output projected to rise to 62.8 billion cubic meters in 2024. This growth will be driven by ongoing production at the country’s largest fields, Tengiz, Karachaganak, and Kashagan, as well as the launch of new sources, including the Rozhkovskoye, Anabai, and Urikhtau fields. “Our goal is to increase gas production to 74 billion cubic meters by 2030,” Zhamauov stated. “But the key task is to process gas within the country as efficiently as possible to supply our citizens and industry, as well as to create a raw material base for gas chemistry.” Currently, over 85% of Kazakhstan’s gas production comes from the Tengiz (26%), Karachaganak (41%), and Kashagan (19%) projects. By the end of 2024, marketable gas output is expected to reach 28.7 billion cubic meters, including Tengiz (8.7 bcm), Karachaganak (7.5 bcm), Kashagan (4.7 bcm), Zhanazhol (3.3 bcm), and other fields (3.6 bcm). Of this, 21.2 billion cubic meters (79%) will be consumed domestically, while 5.6 billion cubic meters (21%) will be exported. Zhamauov noted that gas production will increase by 5.9 billion cubic meters, reaching 34.6 billion cubic meters by 2030, due to the introduction of new gas processing plants (GPPs). Two GPPs, with capacities of 1 billion and 2.5 billion cubic meters respectively, will be built at the Kashagan field. A 4 billion cubic meter facility will be developed at Karachaganak, while a plant in Zhanaozen will add another 900 million cubic meters per year. LNG Plant in Astana A liquefied natural gas (LNG) plant with a capacity of 75,000 tons per year is also planned for Astana. Chingiz Cherniyazdanov, director of the Kazakh Institute of Oil and Gas (KING), shared details of the project during the forum. “The Astana LNG complex will be located in the capital’s industrial zone,” Cherniyazdanov said. “We will build the first stage with a production capacity of 75,000 tons per year, as well as a hub for LNG storage. Commissioning is scheduled for 2027.” The plant will source feedstock from the Saryarka gas trunkline (Kyzylorda-Zhezkazgan-Temirtau-Astana). A storage facility will be constructed to balance seasonal fuel demand during colder months. KING also plans to use the LNG to launch a vehicle conversion service. Cherniyazdanov added that, following completion of the second string of the Beineu-Bozoi-Shymkent gas pipeline, which will double capacity from 15 to 30 billion cubic meters per year, the LNG plant could expand to a second stage, increasing production to 100,000 tons per year. The pipeline expansion will be carried out in two phases: from September 2025 to July 2027, and from August 2027 to January 2029. Expanded Gas Infrastructure and...

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Trump’s Trade War Against China: Opportunities and Risks for Central Asia

Experts believe that Central Asian countries stand to gain from U.S. President Donald Trump’s renewed trade war with China, but the region also faces substantial risks. Kazakhstan Bears the Brunt On April 3, Trump signed an executive order imposing “reciprocal” customs duties on goods from dozens of countries. Kazakhstan faced the steepest tariff in Central Asia at 27%, while Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan each received a flat 10% rate. Kazakhstan’s Ministry of Trade explained that 92% of the country’s exports to the U.S., including crude oil, uranium, silver, and ferroalloys, were among the exempt categories listed in the order. As a result, only 4.8% of total exports to the U.S. would be affected. The government has announced its intent to hold consultations with Washington to avoid further tariffs. More broadly, global economic uncertainty tied to the trade war may cause further weakening of national currencies across Central Asia. Declining demand for oil could depress prices, posing a particular threat to Kazakhstan, where oil is a primary export. On April 9, Trump announced a 90-day freeze on additional tariffs, applying a temporary 10% duty for more than 75 countries, excluding China. Open Confrontation with Beijing In a sharp escalation, the U.S. raised tariffs on Chinese imports to 145%. Beijing retaliated with 125% tariffs on U.S. goods, effectively halting trade. As the Chinese government noted, duties at this level “no longer make economic sense.” On April 13, Trump, responding to pressure from the U.S. business community, reversed duties on processors, computers, smartphones, and electronics. According to Morgan Stanley, 87% of iPhones are made in China, and production of the upcoming iPhone 17 will also be based there. Additionally, four out of five iPads and 60% of Macs are manufactured in China. Meanwhile, Chinese President Xi Jinping has urged European nations to resist what he described as Trump's erratic trade policies. Central Asia: Strategic Position, Mixed Prospects With Chinese goods effectively shut out of the U.S. market, Beijing is likely to turn to alternative trade routes. While Southeast Asian nations such as Vietnam and Malaysia benefitted during the 2018-2019 trade war, this time Trump has also targeted some of them with tariffs, fearing rerouted exports. China’s growing pivot toward Eurasia places the Central Asian countries at a critical transit junction. Their strategic position on land routes to Europe offers untapped potential for trade reorientation. Kyrgyzstan, in particular, has served as a conduit for Chinese goods, with Chinese-manufactured items re-labeled as Kyrgyz products before entering markets across the CIS. This practice, noted as early as 2015, primarily catered to Russia but also extended to Kazakhstan. More recent findings indicate that illegal Chinese imports into Central Asia may total billions of dollars. The existing smuggling infrastructure could be formalized and scaled, facilitating increased regional trade. Long-term benefits could include heightened cargo traffic through Kazakhstan, Uzbekistan, and Kyrgyzstan, sparking Chinese investment in logistics infrastructure and creating jobs in transport. Risks of Overreliance The trade conflict may also incentivize some Chinese manufacturers to relocate assembly operations...

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President Tokayev: Kazakhstan Prepared for Global Market Turbulence

Kazakh President Kassym-Jomart Tokayev has stated that Kazakhstan is prepared to confront the consequences of what he described as one of the most severe global economic crises in recent decades. Speaking at a meeting with the country’s scientific community, Tokayev emphasized that while the international environment is turbulent, there is no reason for panic, noting that Kazakhstan has prior experience in navigating such challenges. “Due to the onset of a ‘tariff war of all against all,’ we are witnessing the breakdown of production and trade chains, the collapse of markets, and heightened volatility in raw material prices. These developments will inevitably affect all nations, including Kazakhstan,” Tokayev warned. Despite these external shocks, he assured that the country will stay the course on its development agenda. All priority infrastructure projects, he confirmed, will continue to receive full financing and will be implemented as planned. In light of growing global uncertainty, Tokayev underlined the fierce competition for investment that lies ahead. “We need to be in very good shape. We must be ready for all scenarios. We must act pragmatically and confidently. Crises are beneficial in that they reveal the presence or absence of managerial talent and give rise to new opportunities,” the president stated. A day earlier, Tokayev had convened a meeting with key figures from the government’s economic and financial sectors to assess the situation following a steep decline in global prices for energy resources and essential commodities. As previously reported by The Times of Central Asia, Kazakhstan’s economy has recently received a temporary boost thanks to increased demand and rising prices for several key exports. This trend followed the U.S. suspension of additional tariffs on various countries, including Kazakhstan.

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German Company to Mine and Process Lithium in East Kazakhstan

Two new industrial facilities dedicated to the mining and processing of lithium are set to be established in the Ulan district of East Kazakhstan Region by 2029. The announcement was made by Nurymbet Saktaganov, akim of East Kazakhstan Region, who noted that plans are underway for the construction of a mining and processing plant, as well as a pegmatite ore processing facility. $500 Million Investment from Germany The project will be implemented with the participation of HMS Bergbau AG, a German mining company that plans to invest $500 million into the development of a lithium deposit discovered in 2023. The initiative will include both the extraction of raw materials and the production of lithium oxide concentrate, a product in high demand across the global high-tech sector. Germany’s interest in Kazakhstan’s rare earth resources was discussed during a September 2023 meeting between President Kassym-Jomart Tokayev and Dennis Schwindt, Chairman of the Board of HMS Bergbau AG. Tokayev reaffirmed Kazakhstan’s openness to foreign investment and emphasized the country’s intention to become a key player in the supply of strategic raw materials. He highlighted lithium’s growing importance in modern industry, particularly for renewable energy and high-tech manufacturing. Operating in the USA, Singapore, South Africa, Poland, and several other markets, HMS Bergbau AG is considered a major independent force in the global solid minerals sector. Its new facility in East Kazakhstan will serve as a vital link in the international lithium supply chain, amid rising global demand driven by electric vehicles, portable electronics, and energy storage systems. $15.7 Billion Discovery by South Korean Researchers In a parallel development, researchers from the Korea Institute of Geosciences and Mineral Resources (KIGAM) announced in 2024 the discovery of a lithium deposit in East Kazakhstan valued at approximately $15.7 billion. Spanning 1.6 square kilometers, the site was previously mined for tantalum. The research, commissioned by the Kazakh government, was based on geological data indicating frequent co-location of lithium, cesium, and tantalum deposits. “KIGAM has been studying the area since last May at the request of the Kazakh government, given that tantalum usually comes with lithium and cesium,” The Korea Times reported. Lithium: A Cornerstone of the New Economy Globally recognized as one of the most critical and scarce elements, lithium is essential for producing lithium-ion batteries that power everything from smartphones and laptops to electric cars and grid-scale energy storage systems. Kazakhstan’s efforts to harness its lithium reserves in East Kazakhstan are expected to boost the country's role in the global energy transition and significantly enhance investment opportunities in the region.

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Kazakhstan Advances Water Sector Reform at High-Level Coordination Meeting

On April 10, the Coordination Council of Partners for the Development of the Water Sector of Kazakhstan held its second official meeting in Astana, co-chaired by Nurzhan Nurzhigitov, Kazakhstan’s Minister of Water Resources and Irrigation, and Katarzyna Wawiernia, United Nations Development Programme (UNDP) Resident Representative in Kazakhstan. The Council, which first convened on September 30, 2024, comprises the Ministry of Water Resources and Irrigation, the UNDP, and more than 30 international partners, including financial institutions and global development organizations. At the meeting, participants reviewed the Council’s work over the past six months and discussed strategic priorities for sustainable water management. A key topic was the 2024-2030 Partnership Water Initiative, adopted in September 2024, which outlines long-term goals for resilience and innovation in the sector. Nurzhigitov discussed the Council’s role in forging productive cross-sector partnerships. “In just six months, we’ve reached concrete agreements and launched new projects with partner countries, development institutions, financial organizations, and major companies. The Ministry has signed three agreements and sixteen memorandums with international partners from the Netherlands, France, Germany, Spain, the USA, Israel, China, the Islamic Development Bank, the Eurasian Development Bank, the International Bank for Reconstruction and Development, and UNDP,” he said. New Agreements Signed at the Meeting Five new cooperation agreements were concluded during the session: The Ministry signed a communiqué with Spain’s Xcalibur Smart Mapping to carry out underground water resource mapping in western Kazakhstan A Statement of Intent was signed with the Islamic Development Bank and UNDP to bolster the technical capacity of Kazakhstan’s water sector, with a focus on digitalization, flood forecasting, climate resilience, and policy development An agreement between the Ministry’s Information and Analytical Center for Water Resources and the Eurasian Development Bank established a grant to develop a National Water Resources Information System by 2026. The project aims to increase transparency, efficiency, and equity in water distribution Kazvodkhoz, the Ministry’s national enterprise, signed a communiqué with PowerChina International to expand cooperation, including training seminars in China for Kazakhstani specialists (the first group of 30 participants is already attending a two-week program) Kazvodkhoz also signed a memorandum of cooperation with Primus Capital Almaty LLP, aimed at developing small hydropower plants at national water facilities A Long-Term Challenge Kazakhstan has long faced serious water-related challenges from the shrinking Aral Sea, driven by reduced transboundary river flows, to destructive spring floods and chronic irrigation shortages in the southern regions. These challenges highlight the urgency of coordinated, international engagement and innovation in water governance.