China is steadily expanding its influence in Central Asia’s oil and gas sector through multi-billion-dollar investments, long-term supply agreements, and a growing network of strategic partnerships. From Kazakhstan to Turkmenistan, Beijing’s state-backed companies are securing key upstream and midstream assets, financing new petrochemical and pipeline projects, and positioning themselves as indispensable players in the region’s resource development.

This expansion is driven not only by China’s rising energy demand, but also by Beijing’s ambition to establish durable overland energy corridors that reduce reliance on maritime routes vulnerable to disruption. Central Asia’s existing and planned pipelines provide China with rare direct access to oil and gas fields across its western frontier, making the region a focal point of its broader energy-security strategy and a cornerstone of Beijing’s efforts to diversify supply while deepening political and economic footholds across Eurasia.

Kazakhstan Eyes Chinese Investment Amid Lukoil Sanctions

Kazakhstan may seek to transfer Russian company Lukoil’s stake in the offshore Kalamkas-Khazar oil and gas project to a new partner, with some industry channels, including the Telegram channel Energy Monitor, speculating about possible Chinese interest.

Lukoil, which has been targeted by Western sanctions, is reportedly planning to exit Kalamkas-Khazar Operating LLP, a joint venture with KazMunayGas (KMG). Each company currently holds a 50% stake. Some commentators have suggested that a Chinese investor could step in, but no replacement has been officially confirmed.

Seconded engineers from KMG Engineering are expected to be withdrawn from the project as of January 1, 2026, with several Kalamkas-Khazar staff members temporarily reassigned to other KMG subsidiaries until a new partner is confirmed.

The project is considered highly promising, with earlier estimates citing reserves of 81 million tons of oil and 22 billion cubic meters of gas. New exploration has identified additional oil-bearing structures. A final investment decision (FID) worth more than $6.5 billion was originally expected by the end of 2025. However, U.S. sanctions against Lukoil have delayed progress.

Located 120 km from the Kashagan field in the North Caspian Basin, the Kalamkas-Khazar block comprises the Kalamkas-More and Khazar fields. The site is situated in Kazakhstan’s Mangistau Region, 60 km from the Buzachi Peninsula.

KazMunayGas Chairman Askhat Khasenov previously confirmed that production was expected to begin in 2028-2029, with peak output reaching four million tons annually. Lukoil was sanctioned by the UK on October 15, followed by the U.S., complicating ongoing negotiations. Despite this, major projects where Lukoil holds minority stakes, such as Tengiz, Karachaganak, and the Caspian Pipeline Consortium, have not been impacted.

A Lukoil withdrawal would create a rare opening for China to secure its first significant offshore position in the North Caspian, a zone historically dominated by Western majors and Russian firms. Such an entry would represent a notable shift in Kazakhstan’s offshore partnership landscape.

Beijing’s Billion-Dollar Energy Deals in Kazakhstan

In September 2025, President Kassym-Jomart Tokayev announced a series of energy deals with China valued at $1.5 billion. During his official visit to China, more than 70 commercial agreements totaling approximately $15 billion were signed, several directly involving Kazakhstan’s oil and gas sector.

The breadth of agreements indicates that Kazakhstan is aiming to move beyond raw-resource exports and position itself as a regional petrochemical and processing hub integrated with Chinese industrial supply chains. Key projects include the construction of a gas chemical complex in the Aktobe Region to produce urea, with China National Petroleum Corporation (CNPC) expected to invest around $1 billion.

The China Development Bank has also signaled its readiness to finance the construction of trunk pipelines for transporting ethane and propane in the Atyrau Region, with investment volumes reported at around $530 million.

China’s CNOOC has been reported as receiving a contract for exploration and production at the Zhylyoi field in the Atyrau Region in June, and on December 3, KazMunayGas launched a joint venture with Sinopec to carry out geological surveys.

In October, KazMunayGas announced a new contract with a Sinopec subsidiary to explore and develop hydrocarbons in the Berezovsky area of the West Kazakhstan Region.

During a visit to China in August 2024, KMG Chairman Askhat Khasenov held high-level meetings with CNPC and Sinopec to discuss joint ventures in petrochemicals, geological exploration, refining, and transport. Among the projects was the urea complex, addressing Kazakhstan’s domestic demand of 350,000-400,000 tons annually.

Other initiatives include gas processing at the Urihtau field, expansion of the Shymkent Oil Refinery (PKOP LLP), and increasing capacity along the Atyrau-Kenkik and Kenkik-Kumkol oil pipelines. Additionally, talks covered plans to manufacture polyethylene, terephthalic acid (TFC), and polyethylene terephthalate (PET), with total investments that could exceed $8 billion.

Many of these projects fall under the China–Kazakhstan Industrial Capacity Cooperation framework, which Beijing uses to export Chinese engineering, technology, and financing models abroad.

Despite strengthening ties with Beijing, Kazakh officials stress that the country remains open to investment from the U.S., Russia, and the European Union. The development of Kazakhstan’s fuel and energy complex remains a central pillar of the national economic strategy.

China’s Deepening Energy Ties with Uzbekistan and Turkmenistan

China is also solidifying its energy partnerships with Uzbekistan. In October, Uzbekistan’s Ministry of Energy met with a CNPC delegation led by Chairman Dai Houliang to discuss projects such as the Central Asia-China gas pipeline, new gas condensate field development in the Bukhara Region, underground storage construction, and workforce training for the energy sector.

CNPC’s direct investments in Uzbekistan now exceed $5 billion. Through its joint venture with Uzbekneftegaz, CNPC has built parts of the Central Asia-China gas pipeline, developed the Mingbulak oil field, and modernized the Bukhara refinery.

Uzbekistan has embraced Chinese financing as it works to reverse declining gas output and manage recurring domestic shortages, making Beijing an increasingly vital partner in stabilizing the sector.

In Turkmenistan, CNPC is developing the fourth phase of the massive Galkynysh gas field, with a planned annual capacity of ten billion cubic meters. This project follows high-level talks between President Serdar Berdimuhamedov and Chinese President Xi Jinping in Beijing in September.

China currently imports about 40 billion cubic meters of Turkmen gas annually via three pipeline routes: A, B, and C. With the completion of Line D, total export capacity is expected to rise to 65 billion cubic meters per year.

Turkmenistan sends more than 80% of its gas exports to China, giving Beijing unparalleled leverage in the country’s energy sector and making the completion of Line D strategically important for both sides.

China’s Emerging Dominance in Central Asia’s Energy Architecture

Taken together, these developments show how China is embedding itself across the entire Central Asian energy ecosystem, not only as a buyer of hydrocarbons but increasingly as a financier, operator, and industrial partner. Beijing’s state-backed companies are moving upstream into exploration and production, downstream into petrochemicals and refining, and horizontally into pipeline construction, gas storage, and equipment manufacturing. This multi-layered presence is allowing China to shape investment decisions, infrastructure layout, and export routes across Kazakhstan, Uzbekistan, and Turkmenistan.

By leveraging long-term financing, rapid project execution, and integration into Chinese supply chains, Beijing is steadily building structural influence in a region where Russia once dominated and where Western companies now play more selective roles. The result is an emerging energy order in which China is positioned not simply as a commercial actor, but as a central external power capable of setting the pace and direction of the region’s resource development.