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Kazakhstan news roundup

Kazakhstan has for a while been a major player on the international oil and gas stage, but its hydrocarbon industry is going through several changes. Some of these are immediately positive, such as the announcement that commercial oil production could begin at the giant Kashagan field within two months of its launch.

There are also rumours of new customers for the nation's oil. Ukraine in particular has a plan to boost production at its faltering oil refinery with imports of Kazakh crude, while Kazakhstan itself is gearing up to transit Russian hydrocarbons to India.

China is also proving to be a profitable partner for Kazakhstan, as new information shows that the nation now produces over 25 per cent of Kazakh oil. Read on for more about the oil and gas sector in Kazakhstan, and its effects on surrounding countries.


More than 25% of Kazakh oil produced by China

China has been a major purchaser of Kazakh oil for some time now, but at the 10th KazEnergy-2015 Forum the extent of its business was revealed. According to Timur Kulibayev, chairman of the KazEnergy Association, the nation now produces more than 25 per cent of all the oil that is extracted in Kazakhstan.

"Chinese companies are among the most active players on the Kazakh oil sector," he said, adding that their operations are only limited by the capacity of Kazakhstan's pipelines. At the moment these are capable of transporting 12 million tons of oil to China, but Mr Kulibayev hinted at increasing this in future.

He said: "As a whole, we understand we could expand the pipeline to China to 20 million tons. I can assure you that both sides are interested and motivated. China is a great market for us, because we neighbour each other without any transit countries." He added to this by saying that trade with China was a priority area for Kazakhstan.


Kashagan oil production to begin 1.5 months after launch?

Commercial production of oil at Kazakhstan's huge Kashagan field could begin as soon as 1.5 months after its launch, according to Uzakbai Karabalin, the nation's deputy oil minister. Trend News Agency reported that this event is scheduled to happen in 2016, if operations go according to plan.

Mr Karabalin said that reaching the required production volume of 75,000 barrels per day would - in theory - not be a problem if all the equipment was installed properly. He added: "The last time we almost reached commercial production in one-and-a-half months, and it is quite possible."

The aim is for the field to eventually grow to a capacity of 875,000 barrels per day, which Mr Karabalin said was "attainable" considering the power of the equipment that is already located on the field.


Kazakhstan looking to transport Russian oil and gas to India

For a long time, the focus of Kazakhstan's oil exports was Europe, the Baltic Sea and the Black Sea. However, changing economic times have caused a shift in this strategy, and a leading figure in the nation's hydrocarbon industry has suggested that India might be the next focus for Kazakhstan.

Specifically, the nation is looking towards transporting Russian oil and gas to India. Kairgeldy Kabyldin, director general of KazTransOil, said: "There are two huge buyers: China and India, situated not far from Kazakhstan. We have already reached China. There is a promising direction to India."

With Indian oil and gas consumption steadily growing, the nation is becoming more and more of a viable option for nations like Kazakhstan. Mr Kabyldin believes that the presence of oil and gas pipelines in nations like Afghanistan and Pakistan - which would have to be travelled through in order to get to India - would provide stability and lead to a safe transit route.


Ukrainian refinery to import Kazakh crude

Ukraine has a single oil refinery that has not been operating at full capacity for some time now, as the majority of its oil previously came from Russia. In a bid to replace its supply, the nation is turning to Kazakhstan.

Currently, the Kremenchug refinery relies solely on Ukraine's own oil production. This is some way below the amount it was built to process, and it has been operating at around 14 per cent capacity for a while now.

To fix this, Ukrtatnafta - the refinery's parent company - has announced plans to import around 160,000 tons of oil from the Caspian Pipeline Consortium each month. Emails sent from the company to Reuters say: "Ukrtatnafta plans to buy two tankers of the CPC blend a month from fields in Kazakhstan." This would ship out from Kazakhstan and be carried across the Black Sea to Ukraine.

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