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Kazakhstan to turn to oil tolling schemes to tackle petrol shortages

05 june 2012, 14:05
An oil refinery. Photo courtesy of wordpress.com
An oil refinery. Photo courtesy of wordpress.com
Upon adopting respective amendments, Kazakhstan will be able to supply about 1.5 million tons of oil a year to China-based oil refineries for processing within oil tolling schemes, Newskaz.ru reports, citing an Oil and Gas Ministry official Alisher Argimbayev as saying June 5.

According to him, the amendments have already been passed by the country’s Majilis (lower chamber) and forwarded to the Senate for further consideration.

The legislation draft introduces tax incentives: oil processing abroad will be taxed as if “it were processed within Kazakhstan”.

According to Mr. Argimbayev, the major goal of the legislation draft is to reduce the country's dependence on petrol supplies from the neighboring Russia. According to the Ministry’s estimates, Kazakhstan could get up to 960 000 tons of AI-92 petrol produced abroad out of Kazakh crude oil.

“Which means that about 1.5 million tons of crude could be processed abroad on an annual basis”, Mr. Argimbayev said.

Among the potential sites to process Kazakh crude there is PetroChina's Dushanzi refinery located close to the Kazakh-Chinese border and capable of handling Kazakh oil.

“We know some of the capacities are not fully used; the facility processes about 12 million tons of oil a year”, he said.

Oil and Gas Minister Sauat Mynbayev had said earlier that, “the current overhaul of the three refineries before 2015 [based in Pavlodar, Shymkent and Atyrau] will enable to raise processing to 17.5 million tons, introducing deeper conversion to start producing petrol in line with Euro-5 emission standards”. Before the modernization the refineries processed a bit over 13 million tons a year.

*A tolling agreement is an agreement to put a specified amount of raw material per period through a particular processing facility.

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