Kazakhstan Senate ratifies agreement on oil exports to Uzbekistan

In Kazakhstan, the deputies of the Senate at the plenary meeting adopted the Law of the RK on ratification of the framework agreement of Kazakhstan and Uzbekistan on cooperation in the field of energy, Bnews.kz reports.

The parties will cooperate in the field of oil and gas, petrochemical and electric power.

Kazakhstan within the framework of this Agreement plans to export up to 5 million tons of oil per year to Uzbekistan. The relevant Agreement was concluded in Tashkent on September 16, 2017.

“The agreement is aimed at strengthening friendly relations between the two countries, promoting cooperation in the oil and gas sector, oil and gas chemistry and power generation, uninterrupted supply of natural gas to the southern regions of Kazakhstan, as well as mutual interest in developing the transit potential of the gas transportation system,” the Committee of the Senate of Kazakhstan on economic policy, innovative development and entrepreneurship said.

The Agreement also provides for the establishment of a coordinating council that will regulate and control the timely implementation of all norms of the Agreement.

“The agreement stipulates that the Kazakhstani side, prior to the commissioning of the Shymkent-Jizzakh trunk oil pipeline, levies oil transportation services through the trunk pipeline with a value-added tax at a zero rate. At the same time, for the purpose of returning the value-added tax in accordance with Kazakhstanki tax legislation, oil through the trunk pipeline is considered by the Kazakh side as an international shipment,” the Committee adds.

As Kanat Bozumbayev, the Minister of Energy of Kazakhstan, reported earlier in late February, over 2018, Kazakhstan delivered more than 260,000 tons of oil to Uzbekistan.

“Kazakhstan is ready to continue supply Uzbekistan with oil from its own resources through the Kenkiyak-Kumkol pipeline and further with transshipment to the railway tank at Shagyr station. Currently, the tariff for this route is $25.12 per ton,” the Minister said.