Petrochemicals and Oil Refining
First Results of the Refining Modernisation Program: So Far, More Words Than Deeds
For Kazakhstan’s oil refining industry, last year was the moment when years of talk about the need for modernization finally took concrete form in decisions and documents. The Concept for the Development of the Oil Refining Industry of the Republic of Kazakhstan for 2025-2040, approved by the government, set an ambitious trajectory: from expanding capacity and increasing refining depth to developing petrochemicals and training personnel. However, the first year of implementation has shown that the path to technological renewal will be long and complex, requiring not only investment but also a change in the industry's economic logic. The Ministry of Energy has summed up the first results in this area.
The Start of a Long Journey: What Was Achieved in 2025
It is clear that the target indicator, expansion of refining capacity from the current 18 mln to 29.2 million tons per year, could not be achieved in a single year, as the completion dates for most projects have been set for 2032. To date, the refineries' combined capacity has increased to 18.5 mln tons. The capacity expansion of the Caspi Bitum plant in the Mangistau region, from 1 mln to 1.5 mln tons of crude per year, was the only project completed in full.
The plant expansion project focused on revamping the main primary crude distillation unit, the ELOU-AVT (electric desalter and atmospheric-vacuum distillation unit). One of the key and most technically complex operations of the project was the installation of a new 140-ton vacuum column almost 40 m high. The works included modernisation of the unit's atmospheric section and process furnaces, and the supply and installation of 24 pumps, 20 heat exchangers, 5 air-cooling units, and other equipment. The Ministry's report on implementation of the Concept's activities in 2025 states: "The project is complete, the commissioning acceptance certificate has been approved.”
This event has significance beyond a single company: Kazakhstan has, for the first time, gained the ability to fully cover domestic demand for road bitumen, which is especially important in the context of large-scale infrastructure projects.
Three Refineries: In a Phase of Active Preparation
The Atyrau, Shymkent, and Pavlodar refineries could not demonstrate physical capacity growth in 2025, since the completion dates for their expansion projects fall in the period 2028-2032. But it was precisely in 2025 that the key preparatory stages were carried out:
- The Atyrau Oil Refinery is to be re-equipped to ensure stable industrial production of benzene and paraxylene, key components for plastics, polystyrene, PET, and other petrochemical products. At the same time, refining volumes are to be increased from 5.5 mln to 6.7 mln tons. Last year, tenders were announced for the development of detailed design documentation and for equipment.
- The Shymkent refinery today has a capacity of 6 mln tons per year, which covers about 30% of domestic market demand for fuel and lubricants. KazMunayGas, together with its Chinese co-shareholder, is working on a project to expand the plant to 12 mln tons per year. The status of the work as of the end of 2025: the pre-feasibility study has been completed, a framework agreement has been signed between CNPC and KMG, and the feasibility study has been launched.
- Pavlodar Petrochemical Plant, alongside capacity expansion from 5.5 mln to 9 mln tons, is undergoing a phased modernisation in three areas: refining depth; diesel fuel quality; and environmental and energy-efficiency improvements. The pre-feasibility study has been completed here, and tenders for the feasibility study and FEED have been announced.
- Samruk-Kazyna Ondeu LLP has also begun tender procedures to select a developer of the pre-feasibility/feasibility studies for the construction of a new refinery with a capacity of at least 10 mln tons per year.
These specific steps are not yet very visible to the wider public, but they are what determine how well and how promptly the expansion projects will be implemented.
Feedstock Balance: First Steps Toward Bringing in Kashagan and Tengiz
One of the key directions of the Concept was to increase the share of crude from large fields in refinery feedstock. In 2025, early signs emerged: ANPZ refined 0.37 mln tons of Kashagan crude, the Shymkent refinery 0.99 mln tons. These are still test deliveries, but, given the government’s announced course toward liberalisation of the country’s fuel market, it cannot be ruled out that sending crude from the megaprojects for domestic refining will at some point become economically attractive.