BAKU, Azerbaijan, Apr. 7
By Nargiz Sadikhova - Trend:
As the 1Q2020 has come to an end, here is the list of the main highlights of Kazakhstan's energy market:
Main highlights of Kazakhstan’s local energy market in 1Q2020
Kazakhstan's government has increased excise rates on gasoline (excluding aviation fuel) and diesel fuel from January 1, 2020. Thus, the excise tax on wholesale sales of gasoline by manufacturers increased from $27.4 per ton to $63.7 per ton, and on retail sales to gasoline producers from $28.7 to $65.
On Jan. 7, 2020, by a decree of Kazakhstan’s Minister of Energy, a list of petroleum goods prohibited or restricted for export from Kazakhstan to outside of Eurasian Economic Union (EAEU) was approved. According to the decree, the list of the petroleum products includes light distillates, jet fuel and diesel fuel, gasoil, toluene and xylene.
On Jan. 16, Kazakhstan’s Mazhilis has approved the draft law on ratification of the agreement between Kazakhstan and Russia for gas supply to Kazakhstan’s Baikonur city. According to the law and the agreement, Baikonur city will now be supplied with natural gas which is 16 times cheaper than the liquefied gas used currently.
On Feb.20, Kazakhstan’s Ministry of Energy approves its bitumen production plans for 2020 as it expects Kazakhstan’s demand for bitumen to be 983,800 tons in 2020.
On Feb. 25, 2020, Kazakhstan’s Ministry of Energy announced that Kazakhstan will extend prohibition of petroleum products transfer outside the country via road transport in order to avoid fuel and lubricants deficit.
Main highlights of Kazakhstan's operation on foreign oil and gas market 1Q2020
Kazakhstan’s revenue from oil export decreased by $744.1 million in January 2020, and by $134.6 million from gas export according to the analysis of Financiers Association of Kazakhstan.
On Jan. 16, 2020, KazTransOil detected an excess of organochlorine compounds in the fractions during crude oil receiving into the trunk pipeline system from CNPC-Aktobemunauygas.
KazTransOil suspended crude oil receiving from CNPC-Aktobemunaygas on the same day until the oil quality issue is resolved. As of Jan. 22, 2020, the acceptance of crude oil from CNPC-Aktobemunaygas was not restarted.
Kazakhstan’s Ministry of Energy, given the decline in volume of oil delivery for transportation through trunk oil pipeline’s system, adjusted the schedule for oil transportation to the refineries of Kazakhstan and for export for Jan. 2020. In particular, the scheduled volume of export to China was reduced.
Kazakhstan did not suspend transit of Russian crude oil to China notwithstanding the suspension of oil export to China.
On Jan. 30, KazTransOil, which is Kazakhstan’s largest oil pipeline company, has announced the change of cost of services for transportation of crude oil and oil products for export from Kazakhstan. Thus, starting from March 1, 2020, the company will charge 7,358 tenge ($19.4) for the transfer of a ton of oil per 1,000 km (without VAT) compared to 6,398 tenge ($16.9) before the increase.
On Feb. 11, Kazakhstan’s Minister оf Energy Nurlan Nogayev said that Kazakhstan is considering the OPEC+ proposal to further decrease the oil extraction volume from its current responsibility of 1.843 million barrels a day.
On Feb. 13, Kazakhstan’s Minister of Energy Nurlan Nogayev has proposed that Russia looks into the possibility of building Power of Siberia 2 gas pipeline going through the territory of Kazakhstan.
On Mar. 11, Kazakhstan’s Minister of Energy Nurlan Nogayev said that Kazakhstan has decreased gas export volume to China by 20-25 percent. Nogayev said that notwithstanding this significant decrease current export volume corresponds to the export volume of 2019. The minister noted that the oil export volume was reduced following a request of China. He added that export of Kazakh oil to China also has not been resumed yet.
Belarus and Kazakhstan continued negotiations on export of Kazakhstan’s oil and petroleum products to Belarus in 1Q2020, which began in 2019.
Main highlights of Kazakhstan’s oil extraction, operation of oil fields in 1Q2020
In Jan. 2020, Kazakhstan’s oil supply was forecast to be 1.85 million barrels a day in 1Q2020 in line with voluntary commitments under the Declaration of Cooperation. However, total liquids supply for 2020 was forecast to grow by 0.02 million barrels a day to average 1.84 million barrels a day.
On Mar. 16, 2020, Kazakhstan’s Minister of Energy Nurlan Nogayev said that Kazakhstan will keep the volume of extraction, processing and export of oil in 2020 at the level of 2019 (89 million tons) notwithstanding the shattering of OPEC+ agreement.
Main highlights of Kazakhstan’s renewable energy sector in 1Q2020
Kazakhstan’s Ministry of Energy’s plans for 2020 are to put 18 renewable energy sources (RES) the capacity of which is 605.5 MW into operation.
Introduction of the ‘On amendments and additions to some legislative acts of Kazakhstan on issues of support for the use of renewable energy and electric power industry’ law is also expected in 2020.
On Jan. 31, an innovative investment project for utilization of rice husk worth 500 million tenge ($1.3 million) of investments is announced to be implemented in Kazakhstan’s Almaty region. An integrated technological process will enable to process rice husk into energy fuel briquettes encompassing a wide range of applications.
On Feb. 7, 2020, construction of the second solar power plant in the Ili District was launched in Kazakhstan’s Almaty region. The construction was launched by Universal Energy company headquartered in Shanghai in cooperation with Kazakh partners. The solar park will be located on the territory of 140 hectares, the construction cost is around 13.1 billion tenge ($34.6 million). Commissioning of the station is scheduled in 2020.
On Feb. 12, Turkey’s Zorlu Energy said that the company is looking to establish its branch in Kazakhstan’s Almaty city. The branch’s operations will be aimed at investments attraction to the area of renewable energy, solar energy and other energy spheres.
On Mar. 12, construction of a first in the region wind park worth 40 billion tenge ($99.8 million) in Kazakhstan’s East Kazakhstan region is announced.
Main highlights of Kazakhstan’s oil and gas companies’ operations in 1Q2020
On Feb. 11, 2020, Russia’s Transneft company has finished paying damages for spoiled oil to 38 Kazakh oil companies. In April - May 2019, at emergency situation related to presence of high concentrations organochlorine compounds on transported oil in system of trunk oil pipelines, JSC "Transneft" led the shipment substandard oil for Kazakh shippers to tankers in Ust-Luga port.
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