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Oil Industry

Junda Oil Refinery Modernization in Kyrgyzstan Set for Completion by August 2026

Kyrgyzstan’s largest oil refining facility, the Junda (Zhongda) refinery in the town of Kara-Balta, approximately 60 kilometers west of Bishkek, is undergoing a major modernization project scheduled for completion by July 31, 2026. The $193.75 million upgrade is expected to increase domestic fuel production and strengthen the country’s energy security. On March 2, a delegation from the National Investment Agency of Kyrgyzstan, the Ministry of Economy and Commerce, and the Kara-Balta municipality visited the refinery to monitor implementation of the investment agreement signed in July 2024 with China Petrol Company Zhongda LLC. Owned by a Chinese investor, the refinery has an annual crude processing capacity of 800,000 tons, producing gasoline, diesel fuel, and liquefied petroleum gas. The modernization is intended to upgrade technical infrastructure and improve operational efficiency. Government representatives have emphasized the project’s importance for industrial development, job creation, and reducing Kyrgyzstan’s reliance on imported fuel. If completed on schedule, the refinery could potentially cover between 50% and 70% of Kyrgyzstan’s domestic demand for motor fuel. This would represent a significant shift for a country that currently depends heavily on imports. At present, local refining capacity reportedly meets only about 5% of domestic fuel demand. Kyrgyzstan consumes approximately 1.6 million tons of motor fuel annually, more than 90% of which is imported from Russia. A key constraint remains the refinery’s dependence on imported crude oil. Authorities are seeking to diversify supply routes, including potential deliveries from Azerbaijan and other oil-producing countries. Originally commissioned in 2014, the refinery was shut down in February 2020 for extensive repairs and modernization that lasted four years. Operations resumed in August 2024. The facility has faced public scrutiny over environmental concerns. Residents of Kara-Balta have complained about air pollution, resulting in fines for emissions violations. The refinery has also been accused of damaging ancient burial mounds, prompting criticism from cultural heritage advocates. The modernization positions the Kara-Balta refinery as a strategic industrial asset in Kyrgyzstan’s efforts to enhance energy security. However, its long-term viability will depend on securing stable crude oil supplies and addressing environmental risks. If successful, the project could reduce Kyrgyzstan’s fuel import bill and mark a significant step toward greater energy independence.

Oil and Gas

Kazakhstan Intends to Accelerate Oil Refining Expansion to 40 Million Tons per Year

Kazakhstan plans to accelerate the expansion of its oil refining capacity to reach 40 million tons per year by 2033, seven years earlier than the previously announced 2040 target. The revised timeline was announced by Deputy Energy Minister Kaiyrkhan Tutkyshbaev at a government meeting on February 17. A full cycle of work is scheduled for 2026-2033, covering feasibility studies, design, construction, and the commissioning of a fourth large refinery with a projected capacity of 10 million tons per year. Once completed, the new facility would increase Kazakhstan’s total refining capacity to 40 million tons annually. Previously, in its updated Concept for the Development of the Oil Refining Industry, the Ministry of Energy had set a target of increasing refining capacity from 18 million to 38 million tons by 2040. The decision to accelerate the timetable follows criticism from President Kassym-Jomart Tokayev at an expanded government meeting on February 10. Addressing Kazakhstan’s dependence on imports, Tokayev noted that the country produces approximately 100 million tons of oil annually but refines only about 18 million tons domestically. This imbalance, he said, has contributed to chronic diesel fuel shortages and reliance on imported aviation kerosene. According to him, modernization of the three existing refineries in Pavlodar, Atyrau, and Shymkent is expected to increase processing capacity from 18.4 million to 27.4 million tons per year. An additional 10 million tons of capacity is to be provided by a new refinery planned for the Mangistau region, near the Caspian Sea coast. Tokayev emphasized that the project should be implemented with the participation of private investors, arguing that financing the construction of a refinery solely from the state budget would be economically unjustified. Tutkyshbaev stated that the ministry has begun preparing initial data on raw material sources and the product mix for the future plant, taking into account demand forecasts and potential export markets. These calculations will determine the refinery’s configuration, the choice of technology licensor, and the precise construction site. The results are expected to be presented in the coming months. The Ministry of Energy expects that expanding existing refineries and constructing a new plant will gradually resolve domestic fuel shortages. Between 2028 and 2030, the deficit of aviation kerosene is projected to decline from 500,000 to 300,000 tons per year, with full elimination anticipated by 2033. Following the launch of the fourth refinery, Kazakhstan is expected to begin exporting diesel fuel and gasoline to neighboring countries. Plans also call for increasing the depth of oil refining from 89% to 94% at existing plants, and to 95% at the new facility. The quality of motor fuels is expected to improve from environmental class K4 to K5. As previously reported by The Times of Central Asia, the Kazakh government began seeking private investors to build the fourth refinery even before Tokayev’s most recent comments on the need for increased refining capacity.

Oil Industry

Kazakhstan and China Launch Project to Double Capacity of Shymkent Oil Refinery

Kazakhstan and China have agreed on the basic parameters of a major expansion project at the Shymkent oil refinery, which will double its processing capacity from over 6 million to 12 million tons of oil per year. According to national oil company KazMunayGas, the Shymkent refinery became Kazakhstan’s leading facility in 2025 in terms of processing volume, handling 6.23 million tons of oil. By comparison, the Pavlodar Petrochemical Plant processed 5.76 million tons, and the Atyrau Oil Refinery 5.47 million tons. Shymkent also topped production output, delivering over 2.28 million tons of gasoline and more than 2.1 million tons of diesel fuel. The refinery is jointly owned by KazMunayGas JSC and China National Petroleum Corporation (CNPC). The two partners plan to expand the plant’s production capacity by constructing new processing infrastructure. A delegation from Kazakhstan’s Ministry of Energy, led by Daulet Arykbayev, Director of the Oil Transportation and Refining Department, participated in a strategic meeting in Qingdao, China, to prepare a feasibility study for the expansion. Following the meeting, both sides approved the project’s basic framework. A central decision was the adoption of the “6+6” configuration: two processing lines, each with a 6-million-ton annual capacity, fully integrated into the refinery’s existing operations. Officials stressed the importance of meeting project deadlines, with the core feasibility work scheduled for completion by 2032 under the framework agreement. The Ministry of Energy also noted that, under Kazakhstan’s broader refinery modernization program, the goal is to increase total national processing capacity from 18 million to 39 million tons of oil per year. Simultaneously, the government is seeking investors for the construction of a new refinery with an annual capacity of up to 10 million tons. The Times of Central Asia previously reported on state plans to attract foreign investment for a proposed fourth major refinery. Government estimates suggest that expanding the three existing refineries to 39 million tons will require investments of $15-19 billion. In March 2025, the Agency for the Protection and Development of Competition recommended partial privatization of the Pavlodar and Atyrau plants to boost efficiency and attract private capital. However, in December, Energy Minister Yerlan Akkenzhenov stated that KazMunayGas currently has no plans to privatize these assets.

Kazakhstan Has No Plans to Privatize Major Oil Refineries

Kazakhstan’s government is not considering the sale of its major oil refineries, despite their inclusion on a national privatization list proposed by the antitrust authority. Energy Minister Yerlan Akkenzhenov announced during a briefing in Astana. Kazakhstan has three large oil refineries: in Pavlodar, Atyrau, and Shymkent. The Pavlodar and Atyrau plants are fully state-owned through the national oil and gas company KazMunayGas and its subsidiaries. The Shymkent refinery operates as a 50-50 joint venture between KazMunayGas and the China National Petroleum Corporation (CNPC), through the PetroKazakhstan Group. In March, the Agency for the Protection and Development of Competition (AZRK) proposed examining options for the partial privatization of the Pavlodar and Atyrau refineries, arguing that the Shymkent plant has benefited from greater efficiency through private sector involvement. In November, both state-owned refineries were listed among 473 entities marked for potential privatization, with a target date of 2028. However, Akkenzhenov clarified that listing an asset on the privatization map does not imply any active plans for its sale. “This is not true; there are no negotiations at the government level today,” he said. “The Agency for the Protection and Development of Competition is operating within its mandate to foster a competitive environment. But this does not mean the state intends to sell the refineries.” He emphasized that the refineries are among the country's most profitable strategic assets, and concerns that they might be sold "for a song" are unfounded. The minister noted that proper valuation methods, such as property value or EBITDA multipliers, would guide any assessment of the assets. “For example, EBITDA multiplied by a factor of five. So, claims that these assets would be sold cheaply are incorrect. Overall, I want to confirm that we are not going to sell them,” he said. As previously reported by The Times of Central Asia, Kazakhstan is exploring foreign investment opportunities for a planned fourth major oil refinery, a project aimed at increasing domestic processing capacity amid rising fuel demand.

Kazakhstan Seeks Foreign Investors for Fourth Oil Refinery Project

Kazakhstan is intensifying efforts to launch its fourth major oil refinery and is actively seeking international investors for the project. The Ministry of Energy has confirmed that expanding oil refining capacity remains a top priority in the country’s long-term energy strategy. According to the ministry, Energy Minister Yerlan Akkenzhenov participated in a recent meeting of the KAZENERGY Association Council, an umbrella organization uniting leading players in Kazakhstan’s oil, gas, and energy sectors. He reiterated that the national Concept for the Development of the Oil Refining Industry for 2025-2040 includes both the modernization of the country’s three existing refineries and the construction of a new facility with a projected processing capacity of up to 10 million tons of oil per year. To help secure funding, Akkenzhenov proposed that KAZENERGY organize a dedicated roadshow to attract potential investors, particularly from OECD member countries. Kazakh Prime Minister Olzhas Bektenov recently confirmed in response to a parliamentary inquiry that the proposed refinery, with a capacity of 10 million tons annually, could be completed by 2040. One likely location is the Mangystau region, close to key oil production sites. However, this is just one of four options under consideration. The final decision will depend on factors such as the growth of electric vehicle adoption, shifting fuel consumption patterns, and long-term export forecasts. The planned refinery would produce aviation fuels including TC-1 and Jet A-1. Demand for jet fuel is expected to surge with the development of an international aviation hub in Mangystau, where consumption could rise from the current 35,000 tons to 120,000-130,000 tons per year. Currently, Kazakhstan produces between 650,000 and 700,000 tons of jet fuel annually, while domestic demand hovers around 1 million tons. To bridge the gap, the country imports approximately 350,000 tons, roughly 30-35%, from Russia, highlighting the strategic importance of boosting domestic refining capacity. As previously reported by The Times of Central Asia, the updated industry roadmap envisions increasing national oil refining volumes from 18 million to 39 million tons per year. The expansion will require between $15 billion and $19 billion in investment. Kazakhstan’s three largest refineries are located in Pavlodar, Atyrau, and Shymkent. In March, the Agency for the Protection and Development of Competition (AZRK) recommended partially privatizing the Pavlodar and Atyrau facilities to enhance operational efficiency and attract private investment. Analysts say that constructing a new refinery is critical not only for reducing Kazakhstan’s reliance on fuel imports, but also for enhancing its export capabilities amid intensifying competition in the global energy market.

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.