Kazakhstan Featurees - The Times Of Central Asia

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Middle Corridor

Azerbaijan–Kazakhstan Ties Could Reorient Central Asian Integration

The five Central Asian presidents met with Azerbaijan’s Ilham Aliyev in Avaza on October 8 for the Consultative Meeting of the Heads of State of Central Asia and the Republic of Azerbaijan. Azerbaijan’s participation brings a principal outlet for Central Asian trade into the six governments’ economic deliberations. Within their consultative format, the states can coordinate industrial projects with the transport services through which regional producers reach foreign markets. If Azerbaijan and Kazakhstan connect cross-Caspian transport more closely to industrial cooperation, the corridor could become an organizing axis for regional integration. The Case for Trans-Caspian Integration Closer Azerbaijan–Kazakhstan cooperation would make cross-Caspian transport more dependable if trains reach Kazakhstani ports in time for Caspian sailings and cargo arriving at Azerbaijani terminals connects with onward services through Georgia. A 2023 assessment by the International Bank for Reconstruction and Development (IBRD), also called the World Bank, identified trade among Kazakhstan, Azerbaijan, Georgia, and Europe as a driver of corridor demand, giving regional exporters a place alongside China–Europe transit traffic. Onward connections from the China–Kyrgyzstan–Uzbekistan (CKU) railway now under construction could run through Turkmenistan and across the Caspian to Azerbaijan, providing an alternative to routes through Iran. Conflict involving Iran strengthens Azerbaijan’s position as the more dependable western outlet for Europe-bound exports. Greater predictability could offset the cost of a Caspian crossing by reducing the stocks firms must hold against delays and the losses caused by interrupted deliveries. Extending the operating coordination developed with Kazakhstan to these southern connections could make Azerbaijan commercially preferable for Central Asian exporters serving European markets. Kazakhstan and Azerbaijan occupy the principal positions in this prospective reorientation. Together, they represent approximately one-third of the six countries’ population but account for more than three-fifths of their nominal GDP. Yet bilateral merchandise trade amounted to only $470.7 million in 2025. Their combined economic weight is thus disproportionate to the commerce presently linking them. The infrastructure and institutions connecting industrial investment to markets across the Caspian could give the two countries a basis for organizing wider regional integration, provided firms sustain commercial relationships through those connections. The Bilateral Basis for Regional Integration Export commitments depend on the cost and timing of the complete transport service. At Avaza, Kazakhstan’s President Kassym-Jomart Tokayev attached “particular importance” to developing the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. His Azerbaijani counterpart, Ilham Aliyev, advocated joint investment, manufacturing, and entry into foreign markets. For firms undertaking joint production, the commercial viability of Aliyev’s proposal would depend on transport coordinated from departure to delivery. Kazakhstan is developing the Middle Corridor along with the eastern branch of the International North–South Transport Corridor, which links Russia and Iran through Kazakhstan and Turkmenistan. At Avaza, Turkmenistan’s President Serdar Berdimuhamedov supported the development of North–South corridors in addition to East–West routes. Tokayev also highlighted the continuing importance to Kazakhstan of the North–South route in cooperation with Russia. Kazakhstan’s multi-vector approach thus extends to transport infrastructure: the Middle Corridor strengthens westward access without displacing the commercial connections maintained...

Grain Trade

Kazakhstan’s Grain Exports to Europe Hit Russian Rail Bottleneck

Russian Railways (RZD) has rejected October requests to transport grain from Kazakhstan through Russia to Estonian ports, citing insufficient rail capacity. There is no formal ban on shipments, but without approval, exporters cannot move their cargo along the usual route. Zeynolla Abdumanapov, head of Kazakhstan's National Association of Exporters KazGrain, reported the problem. The affected rail border crossings are Ivangorod–Narva and Pechory–Koidula, through which Kazakhstan's shipments travel to the Estonian ports of Muuga and Sillamäe. The Baltic route is particularly important for shipments of Kazakhstan's durum and high-protein wheat, as well as oilseed flax, to Europe. These crops command higher prices than ordinary wheat. On October 8, Estonia banned the transit of grain originating in or exported from Russia and Belarus. The restrictions do not apply to grain from Kazakhstan passing through Russian territory, and exporters had hoped to take advantage of available capacity at Estonian ports, where Russian grain transit had already been virtually nonexistent. However, disruptions to shipping through the Black Sea, caused by Ukrainian attacks on Russian port infrastructure and vessels, have forced Russia to redirect much of its grain toward its own Baltic ports, including Ust-Luga and Vysotsk. St. Petersburg is another destination. Russian grain also continues to pass through Latvia and Lithuania, which have not imposed equivalent bans. The shift has increased pressure on the railway network serving the Baltic region. According to Reuters, RZD has given priority to grain shipments heading toward Baltic and Arctic ports. Russia has also raised freight tariffs for shipments to Baltic and Finnish border crossings. Gani Yessenbayev, a representative of Kazakhstan Temir Zholy (KTZ), the country's state railway operator, told the Eurasian AGRICOM 2026 conference that KTZ is negotiating with RZD and recommending that exporters resubmit their applications. The volume of cargo affected by the rejections has not yet been disclosed. Russia can be bypassed via the Trans-Caspian International Transport Route through Azerbaijan and Georgia. However, KazGrain estimates that shipping costs along this route are roughly twice as high, while transshipment capacity is constrained by the facilities at Georgia's Port of Poti. For large-scale wheat exports, the additional costs could prove too high. Kazakhstan's grain trade with Iran is also becoming more difficult. According to Abdumanapov, sea freight rates from Aktau have risen from $17 to $95 per metric ton. Suppliers from Kazakhstan must compete with cheaper Russian grain, while a stronger tenge further reduces their export earnings in local currency. Most of Kazakhstan's grain exports, however, go to neighboring countries rather than Europe. From January through September 2026, grain shipments by rail for export increased by 14% to 8.4 million metric tons. Of that total, 5.5 million tons went to Central Asia. Uzbekistan received 4.11 million tons and Tajikistan 1.18 million tons. Shipments to Afghanistan totaled 762,000 tons, while China received 750,000 tons. Kazakhstan increased its agricultural export revenue by more than a third in 2025. The restrictions on transit through Russia therefore primarily threaten sales of Kazakhstan's higher-value agricultural products to the European Union. Future shipments will...

Data Centers

Kazakhstan Data Centers: Will There Be Enough Electricity and Customers?

Kazakhstan aims to become a regional hub for data processing and artificial intelligence (AI). Data Center Valley is under construction in Ekibastuz, United States-based Firebird is involved in preparations for a major computing complex, and new fiber-optic lines are expected to connect the country to Europe across the Caspian Sea. Authorities hope to attract billions of dollars in investment and develop hundreds of megawatts (MW) of capacity. The main questions are whether the power grid can meet such demand and whether there will be enough international customers. Ekibastuz: The First 50 MW of a Promised Gigawatt At the center of these plans is Data Center Valley in Ekibastuz, an industrial city in northeastern Kazakhstan. The complex is eventually expected to expand to 1 gigawatt (GW) of capacity. According to the government, the first phase is designed for 50 MW. By August, earthworks were approximately 90% complete, and builders had begun laying foundations, with the first facility scheduled to launch in June 2027. Firebird AI: $10 Billion in Agreements On October 2, national telecommunications operator Kazakhtelecom, KT-Telecom, and Firebird AI KZ signed an initial agreement covering the construction and long-term leasing of computing infrastructure. Earlier, the government announced a package of agreements worth up to $10 billion with Firebird, involving U.S.-based NVIDIA as a technology partner. The project provides for the potential deployment of up to 100,000 graphics processing units (GPUs), specialized chips used to train and run AI systems. For now, the $10 billion represents the announced value of the agreements. How much money will go directly toward construction and equipment purchases has not been publicly disclosed. Singapore-based Energy Capital Global has also expressed interest in Kazakhstan’s market. The company is considering a data center campus at Data Center Valley with an initial phase of approximately 100 MW and the potential to expand to 1 GW. In August, it signed a memorandum of understanding with KT-Telecom. Trans-Caspian Cable: A New Data Transmission Route Data centers need fast communications links to serve international customers. Kazakhstan and Azerbaijan are developing an undersea fiber-optic connection between Aktau and Sumgait. On October 6, Kazakhstan's Minister of Artificial Intelligence and Digital Development, Zhaslan Madiyev, announced that the approximately 390-kilometer undersea section of the cable had been completed. The line is scheduled to launch in October 2026. The Trans-Caspian route is intended to connect China and Central Asia with the South Caucasus and Europe. For Kazakhstan, it offers an opportunity to reduce dependence on Russian transit routes. According to the Caspian Policy Center, approximately 95% of the country's outbound international internet traffic passes through Russia. Kazakhstan is also building an approximately 4,500-kilometer West–East fiber-optic backbone, connecting the Caspian coast with the Chinese border. More than 2,200 kilometers have been laid, with construction scheduled for completion by the end of 2026. The new routes would also provide alternative connections, reducing the risk of widespread disruptions if individual lines are damaged. The Existing Market: Tens of Megawatts Versus Hundreds Planned As of October 7, 2026, the industry directory...

Kashagan Oil Field

Exxon Reportedly Blocks Settlement Over Kazakhstan’s $5 Billion Kashagan Fine

ExxonMobil has blocked a proposed settlement over Kazakhstan’s $5.2 billion environmental fine against the operator of the Kashagan oil field, according to an October 9 Bloomberg report citing unnamed sources. The dispute also affects reported discussions about a potential $80 billion expansion, although Kazakhstan’s state oil company has challenged accounts of that proposal. Citing people familiar with the negotiations, Bloomberg said Exxon opposed the latest settlement proposal and persuaded TotalEnergies, previously neutral, to join its position. Together, their opposition was sufficient to halt the proposal. The terms under discussion were not disclosed. Kashagan is operated by a consortium of international companies and Kazakhstan’s state-owned KazMunayGas. ExxonMobil, TotalEnergies, Shell, and Eni each hold 16.81%, while KazMunayGas owns 16.88%. CNPC and Inpex hold the remaining stakes, according to KazMunayGas. According to Bloomberg, KazMunayGas has decided to pay its share of the fine, although the agency did not establish whether payment had been made. ExxonMobil, TotalEnergies, KazMunayGas, Shell, and Inpex declined to comment. Eni, CNPC, and North Caspian Operating Company (NCOC), the field operator, did not respond to its requests. The dispute has also entered discussions over future development. In August, Bloomberg reported that Exxon had proposed an $80 billion joint venture with KazMunayGas to develop western Kashagan. The proposed 50-50 venture could produce up to 600,000 barrels a day, but would depend on resolving the sulfur fine and Kazakhstan's separate claims of around $150 billion. However, KazMunayGas chairman Askhat Khassenov rejected that account, saying it was inaccurate and that the company did not confirm plans for the joint venture. The project has not been approved, and neither the investment figure nor the proposed production capacity has been independently confirmed. KazMunayGas has published separate expansion plans for existing Kashagan operations. Its Phase 2A and 2B projects could raise total oil and condensate production to roughly 710,000 barrels a day, subject to further technical work, gas-processing capacity, and investment decisions. It remains unclear how the reported western development would fit alongside those plans. Kashagan produced approximately 18.2 million metric tons of oil in 2025, according to KazMunayGas. Further expansion would be technically demanding. The field lies in the shallow northern Caspian Sea, where high levels of hydrogen sulfide complicate extraction and processing. The penalty dates to a 2022 inspection of NCOC’s Bolashak processing complex in the Atyrau Region. Inspectors said more than 1.7 million tons of sulfur had accumulated in storage, against a permitted limit of 730,000 tons. NCOC denies the alleged violations and maintains that its sulfur management complied with Kazakh law and project permits. The penalty totals 2.356 trillion tenge, with its dollar value varying by exchange rate. NCOC’s 2024 sustainability figures show that sulfur in block storage fell from 1.775 million tons at the end of 2022 to 613,000 tons at the end of 2024. Annual sulfur production in 2024 was 1.42 million tons, a different measure from the accumulated stockpile involved in the fine. The reduced stockpile does not determine whether the earlier storage breached the permit. Concerns about storage...

Yandex Drone Attack

Drone Strikes on Russian Data Centers Disrupt Yandex Services Across Central Asia

Drone attacks on three Yandex data centers in Russia disrupted taxi, delivery, and other digital services in Kazakhstan, Kyrgyzstan, and Uzbekistan. At the same time, the company said that Kazakh users’ personal data continued to be stored within Kazakhstan. The outages revealed how heavily Central Asia’s digital economy depends on computing infrastructure beyond its borders. Between October 8 and 11, drones attacked three Yandex data centers in Russia. The first facility hit was in Sasovo, in the Ryazan region, where two supercomputers used for artificial intelligence development were located. The center shut down completely. A subsequent strike hit a data center in Kaluga, disabling some of its equipment. On October 11, another attack forced a facility in Vladimir to shut down. Yandex confirmed the damage and said no employees were injured. Company specialists began redistributing computing workloads among the remaining operational sites, but it is not yet known when the damaged equipment will be fully restored. According to Reuters, the strikes on Russian data centers were part of an expansion of attacks on economic and technological infrastructure during Russia’s war against Ukraine. The consequences quickly spread beyond Russia. On October 11, users in Kazakhstan encountered problems ordering taxis, meals, and groceries through Yandex Go, Yandex Eats, and Yandex Lavka. The disruptions also affected scooter rentals and other applications. Drivers and couriers could not receive orders, while restaurants and stores temporarily lost access to some of their customers. Yandex Qazaqstan confirmed the technical problems. By evening, taxi booking was available again, although some functions continued to operate with restrictions. The company explained that when servers fail, computing tasks are transferred to other resources, but switching workloads takes time. Similar disruptions occurred in Kyrgyzstan and Uzbekistan. Users reported errors when booking rides and ordering deliveries, as well as problems displaying fares. In Kyrgyzstan, Yandex’s local division acknowledged the problems and confirmed that damage to infrastructure in one country could disrupt applications in another. For Central Asia, this is more than a temporary inconvenience. Digital platforms have become part of the urban economy, supporting the work of drivers, couriers, restaurants, stores, and delivery services. When an application stops accepting orders, some market participants effectively lose access to customers. However, reliable estimates of financial losses in Kazakhstan, Kyrgyzstan, and Uzbekistan are not yet available. It is unclear how many orders were lost or whether partners will be compensated for their losses. The outages also affected Yandex’s financial services. Dmitry Pirogov, head of the company’s fintech division, said on October 11 that users were temporarily unable to check their balances, pay for purchases, or transfer money through Yandex Pay. According to him, account information is stored in multiple copies, and checks found no loss of records. However, data preservation did not ensure uninterrupted access to financial transactions. This distinction proved particularly important for Kazakhstan. Following the widespread outages, questions arose about why damage to servers in Russia affected applications in Kazakhstan despite local legal requirements to store personal data within the country. Yandex Qazaqstan said...

Avaza Summit

Avaza Summit Highlights East–West and North–South Trade Routes

On October 8, the presidents of five Central Asian states and Azerbaijan gathered in Avaza, on Turkmenistan's Caspian coast, to discuss closer economic and political cooperation. Hosted by Turkmen President Serdar Berdimuhamedov, the annual Consultative Meeting included Azerbaijan as a full participant for the first time, extending the forum across the Caspian to the South Caucasus. The six leaders adopted a joint statement recognizing East–West and North–South transport corridors as priorities for regional development. The summit highlighted the region's growing importance in Eurasian trade and international supply chains. Beyond expanding transport networks, the leaders proposed closer industrial cooperation and cross-border investment, seeking to capitalize on their geographic advantages while preserving flexibility in their international economic relationships. Transport Corridors in Multiple Directions Turkmen President Serdar Berdimuhamedov said, "I believe it is now important to intensify negotiations and practical steps toward establishing transport and logistics connectivity along the East–West and North–South routes." He added, "The Central Asia–Caspian Sea–South Caucasus–Europe corridor should play a key role here." He also emphasized that cooperation among Turkmenistan, Azerbaijan and Kazakhstan as Caspian states could help integrate the wider Central Asian region and other countries into these transport networks. Turkmenistan remained prepared to make its Caspian infrastructure available for mutually beneficial projects. Its port at Turkmenbashi and rail connections toward Iran give it a practical role in both East–West and North–South trade. The Turkmen president's emphasis on North–South connectivity also reflects ongoing transport cooperation with Russia. In May 2026, Turkmenistan reported that Russia, Kazakhstan, Turkmenistan and Iran were working on an agreement to improve freight movement along the corridor's eastern branch. Turkmen officials also outlined preferential railway tariffs and container services linking Turkmenbashi with Russia's Olya port. Kazakh President Kassym-Jomart Tokayev also highlighted growing demand for the Middle Corridor, while emphasizing the continued importance of the North–South route. "For Kazakhstan, the North–South route in cooperation with Russia remains particularly relevant," Tokayev said. The statement is consistent with Kazakhstan's longstanding multivector foreign policy, which seeks to maintain established trade connections while expanding access to alternative transport routes. Kazakhstan, Central Asia's largest economy, occupies a strategic position at the intersection of major East–West and North–South transport routes. For the region’s landlocked economies, a wider choice of reliable routes can improve access to markets and reduce dependence on individual transit connections. Expanding the Middle Corridor Azerbaijani President Ilham Aliyev emphasized investments on both shores of the Caspian, noting that transit cargo volumes along the Middle Corridor increased by more than 10% in 2025 and by almost 20% during the first eight months of 2026. Azerbaijan has invested in ports, railways, highways and other infrastructure to facilitate trade between Central Asia and international markets. It also serves as a transit route for Kazakh and Turkmen oil exports, giving the country a growing role in connecting Central Asian producers with markets to the west. Tokayev proposed exploring the integration of the Middle Corridor with the Trump Route for International Peace and Prosperity (TRIPP), a planned transport link through Armenia connecting mainland Azerbaijan...