Tag Archives: refining

Amec wins Azerbaijani deal

APRIL 26 2016 (The Conway Bulletin) – London-based energy service company Amec Foster Wheeler signed a contract for so-called frontend engineering design at Azerbaijan’s Heydar Aliyev Oil Refinery in Bak. SOCAR, Azerbaijan’s state-owned energy company, awarded the contract. Amec will complete the work by in Q1 2017.

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(News report from Issue No. 278, published on  April 29 2016)

 

Kazakhstan plans to upgrade refinery

APRIL 15 2016 (The Conway Bulletin) – Kazakhstan plans to complete the modernisation of the Shymkent oil refinery by the end of 2017. The Shymkent refinery, which has a capacity of 5m tonnes, makes up 30% of Kazakhstan’s domestic production of petroleum derivatives. It currently operates below capacity and is often closed for maintenance.

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(News report from Issue No. 277, published on April 22 2016)

New refinery opens in Tajikistan

MARCH 25 2016 (The Conway Bulletin) – A new refinery opened in Tajikistan’s northern town of Kanibadam, a major boost to the country’s oil products output. Naftrasom, a private company owned by Nosir Usmonov, built the plant with a $3.5m investment. The refinery will have a capacity of 70,000 tonnes. As confirmed by Tajik President Emomali Rakhmon, who attended the inauguration, Tajikistan will import raw materials for the plant, mostly from Kazakhstan.

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(News report from Issue No. 274, published on  April 1 2016)

 

Turkmenistan boosts CNG

MARCH 18 2016 (The Conway Bulletin) – The Turkmenbashi refinery complex plans to produce 340,000 tonnes of compressed natural gas (CNG) this year, a 13% increase compared to 2015. The majority of the production is booked for exports to Georgia, Iran, Tajikistan, Afghanistan and Pakistan. Turkmenistan also uses CNG domestically as fuel.

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(News report from Issue No. 273, published on March 25 2016)

 

 

KBR wins refinery contract in Azerbaijan

MARCH 7 2016 (The Conway Bulletin) – US-based engineering company KBR said its joint venture in Azerbaijan had won a project management consulting contract for the Heydar Aliyev oil refinery near Baku. SOCAR, Azerbaijan’s state owned energy company, is a partner in the joint venture with KBR. The companies did not disclose the value of the contract.

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(News report from Issue No. 271, published on  March 11 2016)

 

Sasol considers project cut in Uzbekistan

MARCH 9 2016 (The Conway Bulletin) – Due to sustained low oil prices, South Africa’s Sasol is considering dropping its gas-to-liquids project in Uzbekistan. In Uzbekistan, Sasol operates jointly with Malaysia’s Petronas and state-owned Uzbekneftegaz. The project cost stands at around $5.6b. Sasol said it will make a final decision on the project in the first half of the year.

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(News report from Issue No. 271, published on  March 11 2016)

 

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)

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

 

China expresses interest in Kazakh Mangistau

FEB. 2 2016 (The Conway Bulletin) – Alik Aidarbayev, head of the Mangistau region of western Kazakhstan, said that only China has expressed serious interest in paying for the construction of a new oil refinery. The Mangistau region has been working on plans to build Kazakhstan’s fourth refinery for years. Mr Aidarbayev’s comments are important because they show both the financial power of China and the relative weakness of Russia. Kazakhstan has been looking to boost its refinery capacity for some time. It currently has three refineries.

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