Lack of Funds Causes Delay in Kazakh Oil Refineries Modernisation

ASTANA – KazMunayGas recently announced that the modernisation of its oil refineries will be prolonged due to lack of funds. In spite of the ban on Russian fuel, fuel prices will not be affected and there are sufficient reserves from all sources in the state, according to Tengrinews.

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Oil refinery, Atyrau.

“We plan to finish the modernisation in 2016, but as you know, there are many factors which affect it. For example, availability of money is a very important factor. We get the money from parties which refine oil in our company. We planned to refine 15 million tonnes in January and February 2015, but we had to change the plan and refined only 14.3 million tonnes. This means that 700,000 tonnes weren’t refined in the period of time and we didn’t get payment for it and don’t have the money for the modernisation. If this trend continues, I really don’t know if we will have enough monetary funds for the modernisation or not. Maybe we will have to prolong the term,” said Vice General Director of Refining and Marketing Yerlan Koibagarov at a panel discussion in Astana on March 5, as reported by kursiv.kz.

Koibagarov also said that large quantities of low-cost Russian products were imported to the state and until quite recently KazMunayGas had to temporarily suspend its own refineries. He added that the modernisation of oil refineries and ongoing maintenance are completely different types of operations. Ongoing maintenance efforts are permanent because Kazakh oil refineries aren’t new and some of them were constructed decades ago. .

KazEnergy Association General Director Asset Magauov told about the oil refineries’ modernisation. “All oil refineries are slowly modernised and now we can see well-defined improvement of light-oil product quality,” he said at the March 5 panel discussion, Tengrinews reported.

Vice Minister of Energy Magzum Mirzagaliyev stated that beginning March 5, a temporary ban on the import of defined types of fuel from Russia would be imposed for 45 days.

“It is connected with indicative balances, which are signed with Russia on an annual basis. We can get the defined preliminarily-agreed quantity of petroleum, oil and lubricants free of duty in accordance with the documents,” he said at the same panel discussion, according to Tengrinews.

Mirzagaliev again stated that the prohibition won’t affect Kazakh gasoline prices and there is a sufficient supply of gasoline and diesel fuel in the country.

“For example, we agreed that we will get 1.1 million tonnes of gasoline and 760,000 tonnes of diesel fuel this year. Due to the fact that we imported sufficient quantities of petroleum, oil and lubricants this year, we have to control the import of the remaining quantities of the products and import them before the end of this year to avoid deficiencies,” he said.  He again stated that the prohibition won’t affect on gasoline price in Kazakhstan and there are sufficient reserves of gasoline and diesel fuel in the state.

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