Uzbekistan intends to import from Kazakhstan up to 5 million tons of oil per year

Kazakhstan plans to export up to 5 million tons of oil per year to Uzbekistan. This was announced by the Minister of Energy of Kazakhstan Kanat Bozumbayev during a plenary session of the Mazhilis, Kazakh media reported.

“In 2018, more than 260 thousand tons of oil were delivered to Uzbekistan. Kazakhstan is ready to continue to supply Uzbekistan with oil from its own resources through the Kenkiyak-Kumkol pipeline and then with transshipment to the railway tank at Shagyr station. Currently, the tariff for this route is $25.12 per ton,” Kanat Bozumbayev said.

He noted that in accordance with the request of Uzbekistan, the Russian Federation is considering the issue of oil supplies to Uzbekistan in the amount of up to 1 million tons per year. Kazakhstan in this context is considered as a transit side.

“Uzbekistan is interested in purchasing up to 5 million tons of oil per year, including up to 2 million tons from Kazakhstan and up to 3 million tons from Russia. The option of supplying 5 million tons only from Kazakhstan is also being considered,” Bozumbayev added presenting the draft law of the Framework Agreement between the governments of Kazakhstan and Uzbekistan on cooperation in the field of energy.

The Minister stressed that for stable oil supplies to Uzbekistan in the amount of up to 5 million tons, Kazakhstan needs significant investments in the transport infrastructure.

“With the transit of Russian oil through the territory of Kazakhstan, it is necessary to expand the TON-2 oil pipeline from the current 11 million tons to 17.5 million tons per year and reconstruct the “Trudovoye” pumping station. The estimated investment is 70.6 million US dollars. Increasing the capacity of the Kenkiyak-Atyrau pipeline after the completion of the reverse project to transport oil from west Kazakhstan to 8-12 million tons per year, the estimated investment is from 121.1 to 162.5 million US dollars. Construction of a new oil pipeline from the south of Kazakhstan to the border with Uzbekistan with a capacity of 5 million tons per year, an approximate investment is 133.5 million US dollars,” the minister explained.

Taking into account the necessary investments, according to Bozumbayev, the tariff for the transportation of oil from Kazakhstan to Uzbekistan can reach $56.78 - $66.54 per ton, while oil transit from Russia will be about $38.1 per ton.

“It should also be noted that stable deliveries of Kazakh oil to Uzbekistan are possible only from sites located in the western regions of Kazakhstan, mainly from the Tengiz, Kashagan and Karachaganak fields,” Bozumbayev emphasized.