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Oil

Kazakhstan to Invest Up to $19 Billion in Oil Refining Development

Kazakhstan’s Ministry of Energy has unveiled an updated Concept for the Development of the Oil Refining Sector through 2040, aiming to raise the country’s refining capacity to 39 million tons per year. Achieving this goal will require investments ranging from $15 billion to $19 billion. As previously reported by The Times of Central Asia, an earlier version of the Concept targeted a doubling of refining volumes from 18 million tons to 38 million tons by 2040. The updated version, presented during the Kazakhstan Energy Week 2025 forum in Astana by Talgat Makuov, Deputy Director of the Department of Oil Transportation and Refining, slightly increases that target. “Expected investments in sector development, according to the Concept, range from $15 billion to $19 billion, enabling an increase in refining capacity from 18 to 39 million tons per year while significantly improving processing efficiency,” Makuov stated. He added that the document, aimed at enhancing Kazakhstan’s energy security, has been approved by the government and developed in coordination with state agencies and key players in the oil and gas sector. Expansion of Refineries and Petrochemical Complexes “The Concept envisions expanding existing refineries and constructing high-tech, integrated petrochemical complexes with flexible product lines driven by market demand. These facilities will become long-term, high-value assets, increasing the capitalization of managing companies and attracting investors. They will also serve as the foundation for petrochemical clusters,” Makuov said. Kazakhstan’s oil and gas chemistry sector is currently advancing in two main directions. The first is oil-based chemistry, such as benzene and paraxylene production at the Atyrau Oil Refinery (ANPZ), with potential for synthesizing more complex organic compounds. The second is gas-based chemistry, which includes the KPI polypropylene project, and planned projects for polyethylene and butadiene production. Efficiency, Environment, and Innovation “A key performance target of the Concept is improving the ratio of oil production to refining from 5:1 to 2.5:1, aligning with OECD benchmarks, supported by the introduction of new refining and petrochemical facilities,” Makuov explained. “Environmental standards and emission reductions are a priority, consistent with Kazakhstan’s decarbonization goals and green development agenda. Additionally, efforts are underway to establish applied research capabilities, including the creation of a dedicated R&D institute for oil refining and petrochemistry.” Makuov emphasized that implementation of the Concept will support the sustainable development of the sector by balancing economic, environmental, and social objectives. It is expected to ensure domestic supply of high-quality petroleum products, increase export potential, particularly to fast-growing Asian markets, create new jobs, and improve the country’s investment appeal. Earlier this year, Kazakhstan also announced a $15 billion investment in the oil and gas chemical sector through six major projects, aiming to transition from raw material exports to higher-value industrial production.

Investments

ValueLBH Fund to Invest Up to $1.5 Billion in Kazakhstan’s Economy

Kazakhstan is exploring joint investment projects worth up to $1.5 billion with international investment firm ValueLBH Fund, targeting key sectors of the national economy. Talks were held in Astana between Gabidulla Ospankulov, Chairman of the Investment Committee under the Ministry of Foreign Affairs of Kazakhstan, and Shimon Ben Hamo, Chairman of the Board of Directors of Dan Capital and Managing Director and Partner at ValueLBH Fund. The discussions focused on expanding investment cooperation and launching projects in transport and logistics infrastructure, agriculture, raw materials processing, renewable energy, oil refining, and high-tech manufacturing. According to Kazakhstan’s Ministry of Foreign Affairs, the two sides examined specific initiatives such as the construction and modernization of logistics hubs linked to international transport corridors, the deployment of advanced technologies in agriculture, the creation of joint ventures in solar and wind energy, and the development of domestic oil refining capacities. Ospankulov stated that Kazakhstan is prepared to offer a comprehensive range of state support measures while ensuring access to global markets. “Partnerships with leading investment funds create valuable opportunities for Kazakhstan to diversify its economy and introduce cutting-edge technologies,” he said. Ben Hamo underscored the country’s strategic location and stable macroeconomic fundamentals, highlighting its potential for integration into global supply chains. The parties agreed to continue consultations and explore the signing of framework agreements. ValueLBH Fund operates across real estate, energy, infrastructure, and agribusiness, with a strong commitment to environmental sustainability and social responsibility. As previously reported by The Times of Central Asia, the Eurasian Development Bank (EDB) recently launched the Eurasian Transport Network Observatory, a database tracking 325 infrastructure projects across 13 countries, representing a combined investment of $234 billion as of July 1, 2025.

Fuel Exports

Kazakhstan Plans to Export Up to a Third of Its Fuel Production by 2040

The government of Kazakhstan has approved a long-term development strategy for the oil refining industry for the period 2025-2040, significantly increasing its forecast for petroleum product exports. The new plan triples previous export projections, aiming for exports to account for 30% of total production by 2040. According to the strategy, key priorities include expanding refining capacity and boosting exports to China, India, and neighboring Central Asian countries. By comparison, in May 2024, the Ministry of Energy had presented a separate draft strategy looking toward 2050, which proposed limiting fuel exports to 10%, and only in cases where domestic supply exceeded demand. Refinery Modernization and Capacity Goals The new strategy builds on recent progress. Following the modernization of Kazakhstan’s three largest refineries, Atyrau, Pavlodar, and Shymkent, total oil processing capacity reached 17 million tons per year. The plan envisions boosting this figure to 39 million tons annually by 2040. “The refining depth has already reached 89%, and the motor fuel produced now meets Euro-4 standards and higher. These improvements have allowed us to meet 90-95% of domestic demand and created favorable conditions for the export of high value-added products,” the Ministry of Energy stated. The strategy calls for expanding existing facilities and constructing a new petrochemical complex to raise refining depth to 94%. This will ensure full domestic fuel coverage amid projected annual demand growth of 1.5-2%, driven by urbanization and industrial development. A major focus will be the advancement of Kazakhstan’s oil and gas chemical industry, including the production of polymers, fertilizers, and other high-value products. Up to $5 billion is expected to be invested in this sector. “The strategy is designed to attract foreign investment, particularly given the country’s reserves of 30 billion barrels of oil. In the context of the global energy transition, this will position Kazakhstan as a regional leader in hydrocarbon processing and enhance economic resilience to global commodity price fluctuations,” the ministry emphasized. Implementation is scheduled to begin in 2025 with pilot projects for refinery digitization. Current Production and Export Landscape In 2024, Kazakhstan’s refineries produced 13 million tons of petroleum products, 1% more than in 2023, according to national oil and gas company KazMunayGas. This included 4.3 million tons each of gasoline and other fuels, and 4.4 million tons of diesel. Kazakhstan also imported 1.2 million tons of fuel from Russia. Prior to the reintroduction of export restrictions in 2024, the country exported 13,500 tons of motor fuel. Similar bans were in place in 2021, 2023, and 2024, meaning Kazakhstan’s fuel exports effectively occurred only in 2020 (nearly 120,000 tons) and 2022 (1,800 tons). As previously reported by The Times of Central Asia, Kazakhstan is planning to invest $15 billion in its oil and gas chemical sector as part of six major projects aimed at strengthening downstream capacity and export potential.

Oil

Kazakhstan Aims to Double Oil Refining Capacity by 2040

Kazakhstan plans to double its oil refining capacity to 38 million tons by 2040, according to the country’s Minister of Energy, Yerlan Akkenzhenov. The announcement came during a recent meeting with executives from the national oil company KazMunayGas and representatives from the country’s four main refineries: Atyrau, Pavlodar, Shymkent, and the Aktau-based Caspi Bitum plant. Akkenzhenov said the goal is enshrined in Kazakhstan’s new Oil Refining Industry Development Concept for 2025-2040, which aims to significantly boost the share of refined oil, improve resource efficiency, and increase the production of value-added petroleum products. Key objectives of the strategy include: Increasing the depth of refining to 94%, aligning with global best practices; A full transition to high environmental standard fuels, such as K5 gasoline and Jet A-1 jet fuel; Expanding the production of petrochemical products for both domestic and international markets; Enhancing the technological sophistication and operational efficiency of Kazakhstan’s refineries. “We must not just supply the domestic market with fuel today but lay the foundation for technological sovereignty and sustainable development for decades to come,” Akkenzhenov said. “The successful realization of this concept depends on our ability to work efficiently, make bold decisions, and take responsibility for them. There is no time for hesitation, the country expects concrete results: modern plants, quality products, and reliable power supply.” As part of the initiative, the minister urged the accelerated development of a feasibility study to double the capacity of the Shymkent refinery and called for swift agreement signings with potential partners. He also stressed the need for the Pavlodar petrochemical plant to begin work on its next expansion phase. Meanwhile, the Atyrau refinery is to focus on implementing approved projects while preparing for further capacity growth. The Caspi Bitum plant has been tasked with completing post-modernization commissioning and ensuring stable operations. Kazakhstan’s three major oil refineries are located in: Pavlodar (northeast); Atyrau (west); Shymkent (south). As previously reported by The Times of Central Asia, the national antimonopoly agency proposed in March to privatize state stakes in the Pavlodar and Atyrau refineries, a move that could reshape the sector’s ownership landscape.

Privatization

Kazakhstan Proposes Privatization of Two Major Oil Refineries

Kazakhstan’s Agency for Protection and Development of Competition (AZRC) has proposed the partial privatization of the Atyrau and Pavlodar oil refineries. According to Rustam Akhmetov, the agency’s first deputy chairman, the proposal involves selling 50% of the state’s stake in these assets. Current Refinery Ownership Structure Kazakhstan operates three major oil refineries, located in: Pavlodar (northeast) Atyrau (west) Shymkent (southern region) The Pavlodar refinery is fully owned by KazMunayGas Refining and Marketing JSC, a subsidiary of the state-owned KazMunayGas (KMG). Similarly, the Atyrau refinery is 100% state-owned through KMG. In contrast, the Shymkent refinery operates under a 50-50 joint venture between KMG and China National Petroleum Corporation (CNPC) through PetroKazakhstan Group. Shymkent as a Model for Privatization AZRC cites the Shymkent refinery as the most efficiently operated among the three. “We see a successful example in Shymkent, where 50% is owned by the private sector. Most importantly, private management means fewer government officials in operational roles. As a result, there are significantly fewer accidents, fewer technological failures, and less downtime for repairs. This confirms that private sector management is more effective,” Akhmetov told reporters on the sidelines of Parliament. He also noted that preliminary discussions on privatization have already taken place within the government. Oil Refining in 2024 According to the Ministry of Energy, Kazakhstan is expected to refine 17.9 million tons of oil in 2024, yielding 14.5 million tons of oil products. The three main refineries processed similar volumes in the previous year: Shymkent refinery 5.74 million tons of oil processed 2.09 million tons of motor gasoline 1.78 million tons of diesel fuel 319,000 tons of jet fuel 335,000 tons of liquefied petroleum gas Atyrau refinery 5.5 million tons of oil processed 1.6 million tons of gasoline 1.6 million tons of diesel fuel 188,000 tons of jet fuel 213,000 tons of autogas Pavlodar refinery 5.5 million tons of oil processed 1.6 million tons of gasoline 1.8 million tons of diesel fuel 236,000 tons of jet fuel 321,000 tons of liquefied petroleum gas In addition to these major refineries, more than two dozen mini-refineries across Kazakhstan contribute to oil processing. Privatization of Other Key Sectors Akhmetov also revealed that AZRC has recommended the privatization of most municipal utilities in the housing and communal services (HCS) sector, including heat and power plants. Additionally, the agency, in coordination with sectoral government bodies, has agreed to privatize a significant portion of the defense-industrial complex, including firms handling government contracts. However, some strategically important enterprises will remain under state control. Akhmetov did not specify which companies would be exempt from privatization. As The Times of Central Asia previously reported, Kazakhstan plans to establish a major defense industry hub at Semey’s tank repair plant, the only such facility in Central Asia.

Caspian Pipeline

A Blow to the CPC: Geopolitical Intrigue Surrounding the Pipeline

More than a week has passed since Ukrainian drones attacked the Kropotkinskaya oil refinery, part of the Caspian Pipeline Consortium (CPC) system. However, the incident remains a topic of heated debate in Kazakhstan. What Happened? On February 17, the Kropotkinskaya oil pumping station, located in Kavkazsky district, Krasnodar Krai, was targeted by multiple UAVs carrying explosives and metal fragments. While there were no casualties, the facility sustained damage and was taken out of service. Oil transportation through the Tengiz-Novorossiysk pipeline has since been rerouted via a bypass system, ensuring that shipments from the CPC Marine Terminal continue as normal. On February 20-21, a Kazakh delegation, including Daniyar Berlibayev, special representative for the CPC project from KazMunayGas, and Yerbolat Mendybayev, Director of Transportation and Logistics at KazMunayGas, visited the Kropotkinskaya station alongside CPC Deputy General Director Hakim Kasymov to assess the damage. At a CPC shareholders' meeting in Abu Dhabi on February 25-26, CEO Nikolay Gorban presented a report on the extent of the damage, equipment dismantling progress, and contractor mobilization status. According to the CPC press service, shareholders pledged full support for repair work, which is expected to take approximately two months. Kazakh Debate: Is Ukraine to Blame? While CPC shareholders, including entities from Kazakhstan, Russia, Europe, and the United States, treated the issue as a technical problem, Kazakh public discourse took a different turn, led by Mazhilis deputies. Parliamentarian Nikita Shatalov questioned Ukraine’s motivations on his Telegram channel: “The Ukrainian side could not have been unaware that 90% of the oil transported through the pipeline is Kazakh, extracted from Tengiz, with revenues benefiting Western companies exporting to the EU. The pipeline is international, with KazMunayGas, Chevron, ExxonMobil, and Italy’s Eni as shareholders. This attack was clearly intended to damage Kazakhstan’s economic interests.” Shatalov emphasized Kazakhstan’s neutral stance in the Ukraine-Russia war, pointing out that diplomatic contacts between Astana and Kyiv have continued at the highest levels, including President Kassym-Jomart Tokayev’s engagement with Volodymyr Zelensky. “Those responsible for this attack on an international consortium must be punished. Kazakhstan must demand accountability from Ukraine for the damage inflicted and the threat to bilateral relations.” His stance was echoed by Mazhilis deputy Marat Bashimov, who called the attack a "direct assault on Kazakhstan’s interests" in a Facebook post: “The Ukrainian side knew exactly how strategically vital the CPC pipeline is for Kazakh oil exports.” Bashimov argued that Kazakhstan has always upheld neutrality, supported diplomatic resolution efforts, and even refused to recognize the self-proclaimed Donetsk and Luhansk republics. Kazakh Debate: Is Russia to Blame? Not all deputies agreed. Mazhilisman Yermurat Bapi strongly rejected demands for Ukrainian compensation, arguing that Kazakhstan has no moral or legal grounds to make such a claim: “For more than three years, Ukraine has been fighting for survival against an aggressor that invaded its territory. As part of this war, Ukraine has the right to choose its defense strategies.” Bapi went further, blaming Kazakhstan’s overreliance on Russian infrastructure for the crisis: “The CPC pipeline was a strategic mistake of...