Oil Chronicles
Oil Chronicles. August 2025
August
As of August 1, the wholesale ceiling price for liquefied petroleum gas has been set at 59,722 tenge per ton (excluding VAT), representing a 15% increase from the previous rate. Retail prices will rise by 7–10 tenge per litre (9–13%), depending on the region.
The new wholesale price will remain in effect from August 1 through December 31, 2025. The Ministry of Energy expects domestic LPG consumption in Kazakhstan to reach 2.6 mln tons this year, up from 2.4 mln tons the previous year. The government abolished state regulation of wholesale and retail prices for gasoline and diesel, effective February 1, 2025, while maintaining price control over liquefied gas.
August 2, during a meeting in Zagreb with Marijan Krpan, the Head of the Croatian Hydrocarbon Agency (CHA), and Askhat Khassenov, CEO of KazMunayGas, bilateral cooperation in geological exploration and field development was discussed. “In particular, KMG and CHA are exchanging geological data with the aim of jointly implementing subsoil use projects. Earlier, KMG presented prospective exploration blocks,” the company stated in its release.
August 2, a section of the Central Asia–Center trunk gas pipeline in the Volgograd Region was damaged following a UAV attack. Technical specialists and emergency services are working at the site. According to the Ministry of Energy of Kazakhstan, “gas transportation within the Republic of Kazakhstan is operating normally. No disruptions in transit or in the functioning of the gas transmission infrastructure have been recorded. Natural gas supplies to the Republic of Uzbekistan through Kazakhstan are being carried out in accordance with the approved volumes and schedules.”
August 4, KazMunayGas dispatched its first oil shipment totalling 85,000 tons to a refinery in Hungary. Marine transportation from the port of Novorossiysk to the Croatian port of Omišalj was handled by Kazmortransflot, KMG’s shipping subsidiary, using the tanker Alatau.
Further transportation from the port to the final destination—the refinery in Hungary—is carried out via the Adriatic Pipeline, operated by the Croatian company Jadranski naftovod (JANAF).
Upon the tanker’s arrival in Croatia, representatives of KMG, MOL Group, and JANAF held a meeting. Following the negotiations, a framework agreement was signed between KMG and the MOL Group regarding future deliveries.
August 4, an Astana court suspended proceedings in a case filed by oil companies developing the Kashagan field against the Atyrau Regional Department of Ecology, valued at approximately $5 billion.
In early 2023, the regional Department of Ecology had ordered the North Caspian Operating Company (NCOC), operator of the Kashagan consortium, to pay a fine of 2.3 trln tenge (about $5 bln) for excessive sulphur storage. The operator denied wrongdoing and filed an appeal.
According to the court, the annulment of the order “does not automatically imply recognition of the absence of environmental violations on the merits. Thus, the court decision does not affect the substance of the violations established by the Department of Ecology and does not preclude the authorized body from taking further action should procedural deficiencies be remedied,” the statement read.
Following an unscheduled inspection by the Environmental Prosecutor’s Office of Aktobe Region of the Aktobe Intergas Central Asia trunk gas pipeline branch, the company was fined a total of over 1.1 bln tenge.
The prosecutor’s office examined compliance with environmental legislation during drilling and the development of new production wells at the Bozoy underground gas storage facility. The work was performed by contractor Munai Service LTD.
At the time of inspection, two wells had expired environmental permits, resulting in a 20 mln tenge fine for the pipeline operator. Since the delay is interpreted as operation without a valid environmental permit, the transfer of drilling cuttings and drilling fluids for disposal was classified as the transfer of hazardous waste to third-party organizations. This violation carries much stricter penalties, bringing the total fine for the two wells to nearly 1.1 bln tenge.
August 5, KMG PetroChem, a subsidiary of KMG, signed an EPC (engineering, procurement, and construction) contract with Tecnimont S.p.A. of Italy, in consortium with Consolidated Contractors International Company (CCIC) of Lebanon, for the construction of a Gas Separation Complex (GSC) at Tengiz.
The EPC contract provides for turnkey design, supply chain support, and construction of a unit with a processing capacity up to 9.1 bln cu m of dry gas per year. The GSC will supply the under-construction polyethylene plant of Silleno LLP in Atyrau Region with feedstock ethane up to 1.6 mln tons per year, and will also produce propane up to 360 thous. tons. These fractions will be extracted from dry gas received from Tengizchevroil. Construction of the plant is expected to be completed in 2028, with start-up in 2029.
Eldar Kazganbayev, a former Vice Minister of Finance, has been appointed Chairman of the Management Board of SAC FEC RK JSC.
The Situational and Analytical Center of the Fuel and Energy Complex of the Republic of Kazakhstan JSC was established in 1992, with the Ministry of Energy as its sole shareholder.
Ninety thousand tons of crude from the Kashagan field have been delivered and successfully processed at Atyrau Refinery. This corresponds to Kazakhstan’s equity share in the North Caspian consortium, operated by PSA LLP.
It is premature to speak of regular deliveries. Under the Production Sharing Agreement signed in 1997, the consortium’s shareholders are exempt from obligations to supply crude to the domestic market. Nevertheless, this is a landmark event. A test delivery to the refinery may indicate that one of the conditions of a new model of engagement between the government and investors could be meeting Kazakhstan’s domestic crude requirements.
August 6, at the Yugo-Zapadnoye Kamyshitovoye field in Atyrau Region, Embamunaigas JSC commissioned a 4.8 MW gas-piston power plant (GPPP).
It will supply power to the company’s fields while simultaneously ensuring efficient utilization of associated petroleum gas. Using associated gas for self-generation will reduce upstream enterprises’ dependence on external electricity sources, significantly lowering purchases from the grid. Upon implementation, electricity procurement savings are expected to amount to 55%.
In 2023, due to numerous power outages at KMG fields originating from the Mangystau Nuclear Power Plant, 416 thous. tons of crude were underproduced in just eight months, implying roughly 99 bln tenge in lost gross revenue.
Olzhas Sapargaliyev has been appointed Director of the Oil and Gas Industry Development Department of the KAZENERGY Association.
Prior to the appointment, he served as Deputy Director of the Association’s Taxation Department.
Karaganda International Airport Saryarka is the first airport in the country to begin construction of a Jet A-1 fuel farm.
The fuel farm project will be implemented in three phases with annual expansion of tank capacity. Phase I, scheduled for completion between late 2025 and early 2026, includes the design and installation of process equipment. Phase II provides for the construction of a 2,000 cu m storage tank and a personnel service complex, with completion at the end of 2026. In Phase III (autumn 2027), total tank capacity is planned to increase to 4,000 cu m. The company is implementing the project in a strategic partnership with PetroChina.
QazaqGaz, through its 100% subsidiary Mangyshlak-Munay LLP, registered at the Astana International Financial Centre, has formed a joint venture, Taiqonyr Energy Ltd, with a charter capital of 44.2 bln tenge. The new company’s core activity is natural gas production.
The second shareholder of Taiqonyr Energy Ltd is Gas Solutions Ltd, owned by Nurlan Artykbayev. According to Forbes.kz, he is the founder and majority shareholder of Qazaq Stroy Group of Companies, ranking 44th among Kazakhstan’s wealthiest businesspeople.
Mangyshlak-Munay LLP holds a subsoil use right for natural gas production at the Pridorozhnoye field in Suzak District, Turkistan Region. In early 2024 it was reported that QazaqGaz had signed a strategic agreement with China’s Geo-Jade Petroleum on joint development of the Pridorozhnoye field.