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Kazakhstan to increase Russian crude transit to China

November 13/2019

MOSCOW (MRC) -- Kazakhstan plans to increase the transit of Russian oil to China by 30 percent after 2023, reported Reuters with reference to Kazakh oil pipeline operator Kaztransoil's statement.

Russias Rosneft currently sends 10 million tons of oil annually to China through Kazakhstan under a deal which will last until 2023. Some of Rosnefts oil is consumed by a Kazakh refinery and replaced under a swap arrangement.

Asked about further transit plans, Kaztransoil said in an email that it wanted to increase the volume.

"We are now working on the issue of increasing transit volumes to China to 13 million tons a year," the company said.

The boost will become possible after Kazakhstan reverses the domestic Kenkiyak-Atyrau pipeline that is used to ship crude in a westerly direction. Doing so will allow Kazakhstan to both pump more oil eastward and supply its refineries with domestic crude, freeing up volumes for China.

As MRC informed earlier, Kazakhstan has banned the export of oil products by car for a period of six months. Last month Kazakhstan's energy minister Kanat Bozumbaev warned against exports to nearby countries of cheaper gasoline and diesel and said prices in Kazakhstan could be raised to the level of Russian prices, according to media reports published on the energy ministry website.

We also remind that in January 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene (PE) plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

Ethylene is a feedstock for producing PE.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased.
Author:Margaret Volkova
Tags:PE, crude and gaz condensate, ethylene, petrochemistry, Rosneft, LG Chem, Kazakhstan, China, Russia, South Korea.
Category:General News
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