Tag Archives: hydrocarbons

Kazakhstan’s KMG makes refining deal

FEB. 24 2016 (The Conway Bulletin) — KMG EP, Kazmunaigas’ subsidiary dedicated to exploration and production, said in a statement it obtained a price increase for oil it ships to refineries at Atyrau and Pavlodar. KMG RM, another Kazmunaigas subsidiary which manages the refineries, will now pay 74% more for shipments of oil to its refinery at Aktau and 16% more for shipments to its refinery at Pavlodar than it did in 2015.

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(News report from Issue No. 269, published on  Feb. 26 2016)

 

Business comment: Refinery deals

FEB. 19 2016 (The Conway Bulletin) — Dealings at Kazakhstan’s state-owned energy company Kazmunaigas can give a deep insight into the country’s oil sector.

Last week, KMG EP, Kazmunaigas’ subsidiary dedicated to exploration and production, said in a statement it obtained a price increase for the oil it shipped in 2015 to the refineries of Atyrau and Pavlodar.

KMG RM, another Kazmunaigas subsidiary which manages the refineries, will now pay 37,000 tenge (around $105) per tonne of oil delivered to both refineries in 2015. This represents an increase of 74% in the case of the Atyrau refinery and 16% for Pavlodar, compared to an earlier agreement, which had not been approved by KMG EP’s independent directors.

KMG EP, which produces around 12m tonnes/year, sends around 2m tonnes to the Atyrau and Pavlodar refineries annually.

But the picture seems much less rosy for 2016. KMG EP said it will receive only 17,100 tenge/tonne ($48) from Atyrau and 31,923 tenge/tonne ($91) from Pavlodar this year, a steep fall from 2015’s revised prices. Although the company said these figures are not yet approved by its independent directors, this foreshadows another set of lengthy negotiations to bring the price back up.

The internal battle for profit margins within Kazmunaigas in this era of low oil prices looks like a battle for scraps. And in 2016, Kazakhstan forecasts a fall in production and lower prices for crude oil to be refined.

This may dent the budget of KMG EP, although it will be bolstered, overall, by a devaluation in the tenge. It earns cash in US dollars and pays most of its workers in tenge.

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(News report from Issue No. 269, published on  Feb. 26 2016)

CPC boosts oil from Kazakhstan to Russia

FEB. 24 2016 (The Conway Bulletin) — Oil transport company Caspian Pipeline Consortium said it will increase the volume of oil it ships from Kazakhstan to Russia by 20% in 2016, to 51m tonnes. Nikolai Brunich, the company’s CEO, said it plans to receive around 2.5m tonnes of oil from Kashagan this year.

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(News report from Issue No. 269, published on  Feb. 26 2016)

 

Kazakhstan lowers export duty

FEB. 15 2016 (The Conway Bulletin) – Kazakhstan will lower its oil export duty in March, Yerbolat Dossayev, minister of economy, said. He said the export duty will now be lowered to $30/tonne from $40/tonne. Mr Dossayev also said that the export tax would be scrapped altogether if the price of oil falls below $25/barrel. Oil producers in Kazakhstan have stopped producing oil because of high export taxes and low prices.

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(News report from Issue No. 268, published on Feb. 19 2016)

 

Turkmenistan increases security over TAPI

FEB. 9 2016 (The Conway Bulletin) – Addressing a government meeting, Turkmen President Kurbanguly Berdymukhamedov ordered his government to increase security over the planned TAPI pipeline that will, it is hoped, pump gas to India. Last month the Taliban destroyed a transmission line sending electricity between Uzbekistan and Kabul. For TAPI to be successful, it needs to be able to guarantee security around the route. Governments that border Afghanistan have been warning that a resurgent Taliban are posing an increasing threat to stability.

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(News report from Issue No. 267, published on Feb. 12 2016)

 

Tecnimont to build plant in Azerbaijan

FEB. 5 2016 (The Conway Bulletin) – Italy’s Maire Tecnimont signed a $180m deal with Azerbaijan’s SOCAR Polymer to build a polyethylene plant near Baku, local media reported. The plant is part of SOCAR’s petrochemical complex in Sumgayit, 30km north of Baku. SOCAR Polymer is a subsidiary of SOCAR, Azerbaijan’s state-owned oil and gas company.

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(News report from Issue No. 267, published on Feb. 12 2016)

 

TCO posts production record in Kazakhstan

FEB. 9 2016 (The Conway Bulletin) – Tengizchevroil, the Chevron-operated oil project near Atyrau in western Kazakhstan, produced a record 27.16m tonnes of oil in 2015, up from 26.7m tonnes in 2014, media reported quoting the company. The data underlines Tengizchevroil’s status as Kazakhstan’s biggest oil exporter. It was supposed to have been overtaken by the giant Kashagan oil field in the Caspian Sea by now but faulty gas pipes have had to be repaired on this project, delaying production until either the end of this year or 2017.

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(News report from Issue No. 267, published on Feb. 12 2016)

 

First petrol from Iran arrives in Tajikistan

FEB. 3 2016,  DUSHANBE (The Conway Bulletin) — Iran shipped its first batch of petrol to Tajikistan, a deal both countries credited to the lifting of Western sanctions.

It’s also, importantly, more evidence of the impact that post-sanctions Iran is having on Central Asia and the South Caucasus. Reports from across the region have shown a sharp increase in trade with Iran since the US and the European Union lifted sanctions on Jan. 16.

These deals have included an agreement with Kazakh airline Air Astana, grPain agreements with Kazakhstan, trade arrangements with Armenia and the arrival of the first train, via Central Asia, direct from China in Iran.

But it is, perhaps, petrol exports to the Central Asia/South Caucasus region where Iran can have the biggest impact.

Officials from the National Iranian Oil Products Distribution Company told local media the shipment of petrol to Tajikistan measured 2.9m litres, a volume they could maintain on a daily basis. If it did send this amount of petrol to Tajikistan every day, Iran’s petrol exports would measure around 750,000 tonnes a year. This roughly equals Tajikistan’s total current consumption. It had previously imported most of its petrol from Russia.

Mohammad-Mehdi Gharaei, director of the distribution company, told media that Tajikistan had asked for the petrol products. “In view of the [post-sanctions] conditions, Tajikistan requested in early February to purchase Iranian gasoline,” he said.

Iran sent petrol to Tajikistan on trucks through Afghanistan.

Iran is a net importer of petrol. This, though, will change later this year when a new super-sized refinery opens on the Persian Gulf. This refinery will turn Iran into a petrol exporter and Central Asia and the South Caucasus will be a prime target market. They just don’t have enough refinery capacity.

Iman Nasseri, of FGE energy consultancy in London, said Iran is looking to capture market share.

“In the post-sanctions era we expect more shipments from Iran. Most of these might have been discussed and negotiated before sanctions were lifted,” Mr Nasseri told The Bulletin.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 266, published on Feb. 5 2016)

 

Editorial: Iranian oil for Tajikistan

FEB. 5 2016 (The Conway Bulletin) – Iran is emerging from its economic exile with force and its impact is being felt across Central Asia and the South Caucasus.

The new petrol export deal with Tajikistan, together with recent deals with Kazakhstan’s Air Astana and the negotiations with Armenia and Georgia over gas supplies, is a testimony of the importance that countries in the region give to Iran as a trade partner.

Iran is still a net importer of gasoline but it is now close to opening a new 18m tonnes refinery on the Persian Gulf coast, which officials say “will change the gasoline balance in Iran” and could possibly turn the country into a net exporter.

For countries like Tajikistan this is good news as it means that Iran could become a supplier of oil for both Central Asia and the South Caucasus.

Tajikistan has previously bought all its refined petrol from Russia. With Iran’s re-emergence onto the scene this over-reliance on its former colonial master is reduced, giving Tajikistan a genuine choice on where to buys its petrol.

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(Editorial from Issue No. 266, published on Feb. 5 2016)