After the completion of the modernization program of its refineries, Kazakhstan completely covered the demand of the domestic market for gasoline and diesel fuel. But it is still not possible to start exporting surpluses.
The market is supplied
The year 2018 was a landmark year for Kazakhstan's oil refining industry. With the completion of the modernization of all three Kazakhstani refineries, the country for the first time in the years of independence completely covered domestic needs for gasoline and diesel fuel. Modernization of the first – Pavlodar Petrochemical Plant – was completed in December 2017. In March 2018, the launch of the complex for the production of aromatic hydrocarbons (CPA) central unit at the Atyrau Refinery – catalytic cracking, resulting in the production of high-octane gasoline increased by more than two times. At the Shymkent Refinery, the first stage of modernization was completed in June 2017, the second on March 15, 2018.
After the complete modernization of the refining capacity, the quantity and quality of the products produced increased. If earlier only oil products of K2 emission standard were produced, after modernization the class increased to K4-K5.
The total design capacity of the plants increased from 14.2 mln to 16.5 mln tons per year. According to forecasts, in 2019, up to 17 mln tons of crude oil (including mini-refineries) will be refined in the country as a whole. The capacity of large refineries to produce high-octane gasoline has doubled, low-octane gasoline has been decommissioned, fuel oil production has been reduced, but jet fuel has been increased. The long-term goal announced by the Ministry of Energy is to increase the volume of oil refining to 19 million tons per year.
The goal is quite achievable, and the growth trend can be traced. The volume of production of such refined products as gasoline, including aviation, and diesel fuel increased by 12.9% and 8.8% respectively over the last year: gasoline up to 2.8 mln tons, diesel up to 3.3 mln tons in January-August 2019.
The Pavlodar Petrochemical Plant is the leader in the production of diesel fuel: 1.2 mln tons. Just over one mln tons were produced at the Atyrau Refinery. The Shymkent Refinery produced 1 mln tons of diesel fuel. But it is the leader in the production of gasoline: 1.2 mln tons. Slightly less gasoline was produced at the Pavlodar (875.3 thous. tons) and the Atyrau refineries (696.5 thous. tons).
The total volume of oil refining at three Kazakhstani refineries – Atyrau, Shymkent (PetroKazakhstan Oil Products LLP), and Pavlodar Petrochemical Plant in January-September 2019, compared to the same period in 2018, increased by 5.6% to 11,892 mln tons of oil.
In response to the request of Petroleum Journal, the press-service of the Ministry of Energy clarified:"by virtue of the modernization of domestic refineries, the domestic market of oil products of the Republic of Kazakhstan is fully covered by its own production, moreover, there is a surplus of oil products in the amount of 300-500 thous. tons."
Initially, it was assumed that Kazakhstan would export these surpluses to its neighbors. In March 2019, Kazakhstan and Russia ratified a Protocol allowing the Republic of Kazakhstan to start supplying gasoline to third countries. And on June 11, the Ministry of National Economy of the country introduced a new rate of export customs duties (ECD) on light oil products. It began to be calculated by a coefficient of 0.9 to the ECD rate for crude oil (in June it was $60 per ton), that is, it received an incentive for exports instead of the previously existing prohibitive rate of $160 per ton.
As the Heads of the Ministry of Energy repeatedly stated in the spring, the beginning of export of Kazakhstan's oil products was scheduled for June-July 2019. Kyrgyzstan, Armenia and Belarus were named as promising markets.