Oil & Gas - The Times Of Central Asia

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Kazakhstan Needs a Fourth Oil Refinery to Meet Its Growing Demand for Motor Fuel

Speaking in parliament on November 25, Kazakhstan’s Energy Minister Almasadam Satkaliyev announced that the country anticipates a shortage of motor fuel by 2036. To address this, he emphasized the need to design a new oil refinery with a capacity of 10 million tons per year by 2030, with construction slated to begin in 2032. According to Satkaliyev, the proposed refinery will ensure Kazakhstan’s fuel demands are met from 2040 to 2050 while also enabling exports to rapidly developing markets in Central, South, and Southwest Asia. Currently, Kazakhstan operates three oil refineries - located in Shymkent, Pavlodar, and Atyrau - which are sufficient to meet domestic demand for gasoline and diesel fuel. However, during seasonal shortages, Kazakhstan imports additional fuel from Russia. Satkaliyev provided details on the country’s fuel production and import figures for 2024. Kazakhstan plans to produce 10.9 million tons of fuel this year, including 5.1 million tons of gasoline, 0.6 million tons of aviation fuel, and 5.2 million tons of diesel. In addition, approximately 1 million tons of fuel will be imported from Russia, comprising 0.285 million tons of gasoline, 0.3 million tons of aviation fuel, and 0.45 million tons of diesel. By 2032, Kazakhstan’s annual fuel production is expected to reach 19 million tons, including 8.2 million tons of gasoline, 1.5 million tons of aviation fuel, and 9.3 million tons of diesel. This increase will not only eliminate the need for imports but also enable the country to export surplus fuel. Satkaliyev also addressed the domestic supply of liquefied petroleum gas (LPG), which is the most affordable and widely used automobile fuel in Kazakhstan. From January to October 2024, Kazakhstan produced 2.5 million tons of LPG, compared to 2.4 million tons in 2023. The Energy Ministry has set the planned production volume for 2024 at 2.9 million tons. To stabilize the LPG market, the ministry has banned its exports since November 2023. The domestic market requires 164,000 tons of LPG monthly, while the ministry distributes 130,000-140,000 tons. Looking ahead, the government aims to meet rising LPG consumption by introducing new production capacities, with plans to increase annual LPG production to 4.2 million tons by 2032.

China Oil & Gas Export/Import Export of Natural Gas Natural gas Gas Pipelines

Central Asia-China Pipeline Delivers 500 Billion Cubic Meters of Gas

For over 14 years, the China-Central Asia Gas Pipeline has been a vital conduit for clean energy, delivering more than 500 billion cubic meters of natural gas to China, according to a report by Xinhua, citing the West Pipeline Company of the Chinese PipeChina Corporation. The Khorgos gas compressor station, a critical component of the pipeline, serves as the primary entry point for Central Asian gas into China. Known as the “head station” and the “heart” of China's second and third lines of the West-to-East Gas Pipeline, the station plays a pivotal role in the system's operation. Since its commissioning in 2009, the Khorgos Compressor Station has operated safely and reliably for over 5,000 days, transporting over 500 billion cubic meters of natural gas. It is recognized as having the highest operational performance in Asia. With an operating pressure of 12 megapascals, the pipeline pumps more than 2,000 cubic meters of gas every second and can transport a maximum of 160 million cubic meters of gas daily. The 522.5 billion cubic meters of natural gas transported by the pipeline is equivalent to replacing 696 million tons of standard coal, reducing emissions by 764 million tons of carbon dioxide, 25 million tons of sulfur dioxide, 379 million tons of dust, and 6.27 million tons of nitrogen oxides. The Khorgos compressor station also contributes to green and low-carbon development. It houses China’s first electricity generation project powered by waste heat from natural gas-fired compressors. This innovation has enabled the station to achieve zero direct emissions for large gas transmission stations powered by gas compressors, with annual power generation exceeding 65 million kilowatt-hours. From the first compressor station, natural gas travels 1,833 kilometers eastward over 84 hours, passing through central Uzbekistan and southern Kazakhstan before entering China at the Khorgos border checkpoint. The gas then feeds into the second and third lines of the West-East Gas Pipeline. With a design capacity of 60 billion cubic meters per year, the pipeline has been operational since December 2009. The pipeline supplies natural gas to more than 500 million people across 27 provincial-level regions and the Hong Kong Special Administrative Region.

Natural gas Russia Oil & Gas Export of Natural Gas Gasprom

Russia’s Zakharova: Gas Deliveries to Uzbekistan Surpass Five Billion Cubic Meters

According to Russian Foreign Ministry spokesperson Maria Zakharova, Russian gas supplies to Uzbekistan, which started in October 2023, have now surpassed five billion cubic meters. She noted that in 2023, Russia, Kazakhstan, and Uzbekistan initiated a two-year agreement to deliver Russian gas through Kazakhstan via a contract between Gazprom and UzGasTrade. “As of today, the volume of gas supplies has exceeded five billion cubic meters. Russian companies Gazprom and LUKOIL are advancing multiple projects to develop gas fields within Uzbekistan. The parties are set on gradually expanding their cooperation in the gas sector. There are, in fact, no bilateral issues that might slow down this energy partnership,” Zakharova shared at a recent briefing. She added that “all matters are being addressed constructively, with energy discussions being a regular part of high-level and interdepartmental negotiations.” This year, key meetings featured talks on energy cooperation, including Russian President Vladimir Putin’s state visit from May 26-28 and Prime Minister Mikhail Mishustin’s visit on September 9-10. “Energy collaboration is a core component of our bilateral relationship, with our foreign policy departments maintaining close contact and offering the needed political and diplomatic support to keep this cooperation moving forward,” Zakharova highlighted.

Oil & Gas Export/Import negotiations Natural gas Gasprom Export of Natural Gas

Turkmengaz Ends Gas Supply Contract with Gazprom Over Pricing Dispute

Turkmenistan's national gas company, Turkmengaz, has not extended its gas supply contract with Gazprom because the parties could not agree on a new fuel price. Turkmengaz Chairman Maksat Babayev explained: "On June 30, as outlined in the contract, we were set to review prices. If both sides agreed on the price, we could extend the contract. However, after negotiations, we couldn’t agree on the commercial terms. So, as per the contract, without an agreement, the contract was to end on June 30, which is what we proceeded with.” He shared this at a press conference following the “Oil and Gas of Turkmenistan – 2024” (OGT 2024) event. Babayev added that for Turkmengaz, the critical factor in starting, resuming, or ending supplies is the commercial aspect. “Contracts for purchase and sale are considered based on mutual benefit,” he explained. “Currently, demand from the north, west, and east is growing, and we are constantly in talks with various buyers and countries, so resuming supplies to Russia is certainly possible.” In 2019, Gazprom signed a five-year contract with Turkmengaz to buy natural gas through June 30, 2024. The agreement covers an annual supply volume of 5.5 billion cubic meters. Previously, Gazprom's head, Alexey Miller, announced that the company doubled the volume of gas supplies to Central Asia from January to August 2024. According to Miller, the republics' rapid economic and social development has opened meaningful new opportunities for Gazprom, which is currently at the highest possible level of gas supply to Uzbekistan.

gasoline Oil & Gas Oil refinery Economy Energy Infrastructure Gas and diesel Oil and Gas

Kyrgyzstan to Modernize Oil Refinery in Jalal-Abad

On September 28, Kyrgyzstan's largest oil refinery, located in the southern city of Jalal-Abad, began a large-scale modernization. Operated by Kyrgyz Petroleum Company, the refinery produces AI-80 gasoline, diesel fuel, and fuel oil. Kyrgyzstan's annual gasoline and diesel fuel demand is 1.4 million tons. The refinery in Jalal-Abad can meet only 6.5% of that demand. After the modernization project, the refinery will be able to meet 32% of the domestic demand. After modernization, AI-92 and AI-95 gasoline production would increase more than 12-fold, and diesel fuel production would grow by 40%. The total investment in modernizing the refinery will amount to $410 million, including $200 million in foreign investments and $110 million from the Kyrgyz government. Today, almost all gasoline and diesel fuel used by Kyrgyzstan is imported from Russia. The Times of Central Asia earlier reported that Kyrgyzstan proposed oil-rich Azerbaijan to sign a long-term contract to supply Azeri crude oil to Kyrgyzstan. Azeri crude oil is needed for Kyrgyzstan’s Junda oil refinery. Located in Kara-Balta, about 100 kilometers west of Bishkek, the refinery reopened late in August after a major overhaul. It now plans to reach its total annual capacity of processing 800,000 tons of crude oil by the end of this year.

Energy Oil & Gas Azerbaijan Renewable energy Oil Oil and Gas Oil refinery

Kyrgyzstan Seeks Crude Oil Supplies from Azerbaijan

At a meeting with Azerbaijan’s Energy Minister Parviz Shahbazov, his counterpart from Kyrgyzstan, Taalaibek Ibrayev, proposed signing a long-term contract to supply Azeri crude oil to Kyrgyzstan. The bilateral meeting took place on September 16 in Bishkek, on the sidelines of the 4th meeting of energy ministers of the Organization of Turkic States (Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, and Uzbekistan). Representatives of Turkmenistan and Hungary attended as observers. The Azeri Energy Minister expressed its readiness for cooperation, and proposed establishing a special working group to organize oil supplies. Ibrayev also proposed that Azerbaijan participate in hydropower and renewable energy projects in Kyrgyzstan, and consider preferential financing of $2 million from the Azerbaijan-Kyrgyzstan Development Fund for the purchase and installation of charging devices for electric vehicles in Kyrgyzstan. Today, Kyrgyzstan’s local capacity for refining crude oil and producing motor fuel covers about 5% of domestic demand, with the rest imported from Russia. During Kyrgyz President Sadyr Japarov’s visit to oil-rich Azerbaijan earlier this year, negotiations were held with the Azeri state oil company, SOCAR, on Azerbaijani oil supplies to Kyrgyzstan’s Junda refinery. Energy Minister Ibrayev commented that the Junda oil refinery requires more than 1 million tons of crude oil annually for refining. On August 30, the refinery reopened in the town of Kara-Balta, about 100 kilometers west of Bishkek. Late in March, the refinery completed a significant overhaul and plans to reach its total annual capacity of processing 800,000 tons of crude oil by the end of this year.