“The project ‘Kalamskas/Khazars, Auezov’ includes a requirement in the tender documentation for the engagement of local design companies (institutes). The work being conducted by the ministry in collaboration with the contractors of major oil and gas projects allows us to predict a significant increase in the share of Kazakh content in the procurement of goods by large oil and gas subsoil users (Kashagan, Karachaganak, Tengiz) by 2029,” he stated.
According to him, from 2021 to 2024, 24 agreements were signed with international investors and original equipment manufacturers, and 27 localization cases were prepared, seven of which were successfully implemented in Kazakhstan from 2022 to 2024. In 2024, contracts were signed between three major oil and gas companies and domestic goods manufacturers and service providers totaling up to $860 million. The vice minister also noted the work done on the mandatory involvement of domestic design institutes in major projects, which will undoubtedly have a positive impact on the indicators of domestic value.
The chairman of the board of KMG PetroChem (a subsidiary of KazMunayGas) Igor Ilyin reported plans to complete the design work on the gas separation complex (GSC) this year.
“To supply the polyethylene project with the necessary raw materials (ethane at a volume of 1.6 million tons per year - ‘Kursiv’), KMG PetroChem is implementing a project to construct a gas separation complex. Agreements have been reached with TCO (‘Tengizchevroil’ - ‘Kursiv’) regarding the volume and cost of dry gas. This year, we plan to complete all design work,” he said during the conference.
He mentioned that the uniqueness of this project lies in the processing of over 9 billion cubic meters of gas with the extraction of valuable fractions — ethane and propane. To transport the liquefied ethane fraction and liquefied propane from the gas separation complex to the oil and gas chemical plants, a main pipeline is planned to be commissioned in 2028. The throughput of the ethane pipeline will be approximately 1.6 million tons per year, and the propane pipeline will be 0.99 million tons per year.
He reminded that previously, KazMunayGas attracted strategic partners for the project to produce 1.25 million tons of polyethylene per year, including the Russian company Sibur and China’s Sinopec. According to him, early construction works have already begun, and the planned commissioning is scheduled for 2029.
The managing director of the oil and gas sector and ecology of the National Chamber of Entrepreneurs ‘Atameken’ (NPP) Muradbek Makhanov proposed lifting the ban on the export of naphtha, fuel oil, and marine fuel, which affects the activities of mini-oil refineries (ORFs). He noted that market participants expect the repeal of the maximum number of existing regulations in the country that directly or indirectly restrict the freedom of price formation and tariffs in the oil products market. He reminded that over the past few years, except for Tengiz, Karachaganak, and Kashagan, there has been a systematic decline in oil production in the country. Specifically, from 2018 to 2023, oil production decreased from 36.3 million to 32 million tons, or by 16.8%. Additionally, the representative of the NPP highlighted the need for a fair distribution of the fiscal burden when implementing oil products.
Meanwhile, the deputy chairman of the board of QazaqGaz Ulan Burkitov reported plans to accelerate the construction of the second string of the Beineu – Bozoy – Shymkent (BBS) main gas pipeline. He stated that work is expected to commence in the current construction season, rather than in September as the company had previously planned. The pipeline has been operating at its maximum capacity of 15 billion cubic meters per year in recent years. Fuel is transported through it for both export to China and for consumers in the densely populated southern Kazakhstan.
“Together with the state of Qatar, we started work on the BBS-2 project last year – this is the second string of the Beineu – Bozoy – Shymkent pipeline – and the main gas pipeline KS-14 Kostanay. The feasibility study for both projects is currently under review. We expect to start BBS-2 sooner, so all efforts are now focused on quickly overcoming any obstacles through the investment headquarters to ensure we do not miss this summer's construction season,” he said during the conference.
Earlier, the company announced that the capacity of the first phase of the second line of the Beineu – Bozoy – Shymkent main gas pipeline will reach up to 10 billion cubic meters of gas per year, and the second phase will be 15 billion cubic meters. Thus, the total capacity of the pipeline will amount to 30 billion cubic meters per year. In the last heating season, the load on the existing pipeline exceeded 100%.
The chairman of the presidium of KazService Rashid Zhaksylykov emphasized the importance of sustainable development in the oil and gas sector and the need for constructive dialogue between operators and businesses. This year, special attention was given to issues of localization, expanding the participation of Kazakh companies in large projects, developing the petrochemical industry, master contracts with operators, and optimizing procurement procedures. Participants discussed tax policy, mechanisms for supporting local businesses, as well as the prospects for new oil and gas chemical projects and international cooperation.