Legislative support required for tolling operations between Kazakhstan and China

Oil&Gas Materials 27 September 2011 16:09

Kazakhstan, Astana, Sept. 27/ Trend, A.Maratov/

Implementation of tolling operations with China in the oil sector requires a legislative support and high level decision, a senior representative of the Kazakh oil sector told Trend on conditions of anonymity.

Earlier Kazakh Oil and Gas Minister Sauat Mynbayev announced about the possibility of tolling operations between Kazakhstan and China. Annual turnover of crude oil could amount to 1.5 million tons, he said.

Tolling system means processing of raw material outside the country with further export of ready products to the markets.

"We are going to implement tolling operations with the Chinese oil refineries to reduce dependence on Russia. We plan to transport some rare sorts of oil such as a high-octane gasoline to the Chinese refineries, then deliver final products to the market for more competitive price", Mynbayev said.

The source said Kazakhstan and China carried out tolling operations even in 2003. However, only some small private companies were engaged in this then, and all efforts to reduce the deficit on local Kazakh market failed because of custom barriers.

The source believes that the lack of legislative basis also made the implementation of this initiative impossible.

However, he didn't exclude the possibility of restoring this system in case of a strong political support.

"Three big oil refineries are located in the Xinjiang-Uygur Autonomous Region bordering Kazakhstan. We may easily deliver oil to these refineries by pipeline and get back ready petrol products by railway", he said.

Edited by E.Ostapenko