Kazakhstan, Canada Expect to Sign Nuclear Power Agreement Before End of 2013

ASTANA – Kazakhstan and Canada are working to finalise a key agreement on the peaceful use of nuclear power before the end of 2013, which would give a major boost to bilateral cooperation in an area where the two countries already hold leading positions globally, Kazakhstan’s Ambassador to Canada Konstantin Zhigalov said.

In an interview with the Kursiv newspaper, the Kazakh ambassador in Ottawa explained that the agreement between the two countries has been under consideration by authorities in both countries for a long time.

“An agreement on the peaceful use of nuclear energy is equally important for both parties. Negotiations on this agreement are in the final stage. The agreement will be signed in four languages: Kazakh, Russian, English and French,” Zhigalov said.

“The agreement will promote a new level of cooperation in the uranium industry, in which Kazakhstan is at the forefront globally. In particular, it provides the opportunity to fully implement an agreement signed last year between Kazatomprom and Cameco Corporation, according to which the Canadian company is serious about expanding uranium mining in Kazakhstan and the production facility for processed uranium products will be built in east Kazakhstan,” Zhigalov said.

During the recent Astana Economic Forum, Senior Vice President of Cameco Corporation Bob Stine once again confirmed the agreement and said that construction of such a facility will begin in 2018 with production expected to begin in 2020.

Economy and trade are the basis of cooperation between the two countries. Kazakhstan’s resources combined with its attractive investment and fiscal environment have drawn more than US$170 billion in foreign direct investment since its independence. Kazakhstan ranks 18th among countries exporting to Canada and cooperation will further deepen and expand on a mutually beneficial basis, Zhigalov said.

An agreement on the mutual protection of investments has been in process for several years, but is not expected to be signed soon.

“This agreement has been in the works for several years, and we do not plan to sign it soon. This is another item for which the negotiation process could be intensified. Last year, talks were held in Ottawa at the expert level and this year at the level of ministers: Kazakhstan’s Minister of Integration Zhanar Aytzhanova came to Canada,” Zhigalov said.

The two countries have already signed dozens of investment agreements with other nations and tested a variety of approaches and, in the process, discovered some areas where their approaches to such an agreement differ. However, investment cooperation is developing rapidly. Canada ranks ninth among the top investors in Kazakhstan. To date, the Kazakh economy has received more than US$6 billion in Canadian investments.

“In spite of the obvious results of our bilateral cooperation, goals we have achieved should be considered only as a solid base for the implementation of great potential,” the ambassador said commenting the bilateral trade and economic cooperation generally.

“According to updated data of the National Bank of Kazakhstan, the growth of direct investment of Canada into the economy of Kazakhstan in 2012 amounted to over USD 168 million. A big share of these funds (81 percent) was directed to the mining industry, including oil and natural gas (74 percent) and metal ores (6 percent), where the development of gold and base metals comes to the fore,” the diplomat noted.

“The financial sector (except for insurance and pension funds) became the new direction for the inflow of investments, whereas in the past, only 18 percent of investments have been directed in the sector from Canada (in 2011 – only 0.5 percent). Kazakhstan is interested in further diversification of Canadian investments in the Kazakh economy, especially in the manufacturing industry, the level of investment in which is still very small,” he said.

“Export from Kazakhstan to Canada primarily consists of crude oil and petroleum products (94 percent), chemical elements and radioactive isotopes (6 percent). Imports from Canada to Kazakhstan are more diverse and include agricultural machinery (18 percent of total volume), aircraft (helicopters, planes – 10 percent), tractors (9 percent), passenger cars (5.6 percent), motor vehicles for the transportation of cargo (3.5 percent), live cattle (3.6 percent), drugs (2 percent), ferrous metals (2.3 percent), tools (2 percent) pumps for liquids (2.3 percent), etc,” noted the ambassador.

“About 96 percent of Canada’s oil is produced in the western part of the country – in the province of Alberta, which has no access to the sea. The pipeline system in Canada until recently was primarily oriented to the south – to the United States of America. At the same time, on the east coast of Canada (mainly in the provinces of Quebec and New Brunswick) there are a number of refineries that are not connected by pipelines to oil-rich Alberta (about 1,500 kilometres away). However, it is located near the deep-water ports from which tanker deliveries of crude oil and petroleum products are carried out across the Atlantic Ocean. Given these factors, the cost of Kazakh oil shipped to the Atlantic coast of Canada is now able to compete with the price of crude oil produced in Alberta and shipped by railways to the eastern provinces of Canada,” he noted.

“In this regard, in 2012 Kazakhstan exported to Canada oil worth USD 3 billion, or 10 percent of the total volume of oil delivered to the country from other states. Our country is fourth among the largest suppliers of oil to Canada after Algeria, Iraq and Norway, ahead of countries such as Saudi Arabia, the United States, Nigeria, Angola, Azerbaijan and Brazil. By the way, almost all of Kazakhstan’s oil comes to Quebec, due to this fact the region is in first place among Canadian provinces in terms of bilateral trade with our country.

“The level of direct investment from Canada into the economy of Kazakhstan in the current year will remain within the parameters of the last year (US$750 million) under conditions of a stable situation on the global market. According to the National Bank of Kazakhstan, in the first quarter of this year, the influx of Canadian investments have reached US$200 million,” Ambassador Zhigalov said.

According to Zhigalov, forecasts for 2014 will be done based on the actual results of the current year, thus it is too early to look to next year.

The ambassador also addressed other spheres of cooperation between Canada and Kazakhstan. The states recently established cooperation in the field of education, including cooperation between the Algonquin Higher Education Institution of Applied Sciences and Technology (Ottawa) and the Satpayev Kazakh National Technical University named after Satpayev. Kazakhstan in Canada have also signed a Memorandum of Understanding related to education. According to the document, both sides agreed on the definition and implementation of joint projects in the field of education, including conducting courses, seminars and bilateral programs. At the same time, a strategic partnership with the Polytechnic Institute of Southern Alberta (SAIT Polytechnic) has begun. It is assisting the creation of an inter-regional centre for training, retraining and advanced training of personnel for the oil and gas industry APEC-Petrotechnic (Atyrau Petroleum Educational Centre Petrotechnic) in Atyrau.

“The centre is staffed in accordance with the requirements of SAIT Polytechnic. Secondly, following a series of meetings in 2012, experts of SAIT Polytechnic and Kasipkor holding company with representatives of government agencies, oil and gas operators and service companies, the main areas of specialization were identified for centre. These include the extraction and processing of oil and gas, electrical, mechanical and automation for oil and gas facilities, as well as a list of occupations and levels of qualifications in accordance with the needs of employers. Third, in late 2012 – early 2013, the first applicants had applied for testing. Those who passed the exam began training in the frames of a programme aimed at improving the language skills (technical English) of students. In September 2013, Kasipkor plans to increase its intake of students for the programme. The first three technical programs are planned to start in January 2014,” the ambassador noted.

“Over the next four years, the establishment of the centre as an independent, self-sufficient organization will take place. In 2017, managerial functions regarding the training of specialists will be fully transferred to the Kazakh side,” he said.

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