Kazakh parliament ratifies agreement on Russian oil transit to China

Photo: Kazakh parliament ratifies agreement on Russian oil transit to China / Kazakhstan

Baku, Azerbaijan, June 26

By Elena Kosolapova - Trend:

Kazakh Senate (Parliament's upper house) ratified the intergovernmental agreement with Russia on Russian oil transit to China, Novosti-Kazakhstan reported on June 26.

The agreement envisages transit through Kazakhstan's territory of 7 million tonnes per year with possible increase to 10 million tonnes per year for a long-term period. Russia will have access to the system of main pipelines for oil transporting by Omsk (Russia) - Priirtyshsk (Kazakhstan) - Atasu (Kazakhstan) - Alashankou (China) route.

The cost of transportation of 7 million tonnes of oil per year will be approved for the entire term of the agreement by Kazakhstan's authorized state body in USD dollar per tonne on the basis of the bilateral agreements.

Kazakh side imposes zero VAT rate on Russian oil transit.

In order to ensure supplies to Kazakh refineries, the Kazakh side is allowed to redirect some volumes of Russian oil to them. But then it will have to substitute this oil for a Kazakh one.

Kazakhstan produces and exports a large amount of oil, meanwhile it imports some oil and oil products from Russia free of duty within the Customs Union. The need for oil supplies from Russia mainly results from the specifications of the Kazakh Pavlodar petrochemical plant, which focuses on refining of West Siberian oil from Russia.

Earlier Kazakh Oil and Gas Minister Uzakbai Karabalin said that Russia will pay about $9.8 per tonne of transported oil.

Edited by C.N.

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