NUR-SULTAN, Kazakhstan – Kazakhstan has abandoned a project to build a fourth refinery in the country, Kazakhstan’s Energy Minister Kanat Bozumbayev told reporters on 24 June.

The government of oil-producing Kazakhstan has long discussed building a fourth refinery, including a joint Kazakh-Chinese-Iranian project to build an oil refinery in the west of the country.

In order to put an end to the disputes, the Ministry, together with the national company KazMunayGas, invited a foreign company, which, by necessary calculations, came to the conclusion that in the medium term, there is no need to build a fourth refinery in Kazakhstan.

“We already have three large modernised refineries, which already do not work at full capacity and there is a surplus of oil products. In addition, there is still a small refinery in the west of the country, which is only at 50% of its capacity,” Bozumbayev said.

According to the minister, there are a number of objective factors that have postponed the construction of a fourth refinery. The export of oil in the presence of a powerful infrastructure (pipelines built through Russia and to neighbouring China) and high oil prices are much more profitable for the oil industry and for the country’s budget than the export of oil products.

“Unfortunately, there are no pipelines through which we could send our gasoline or jet fuel to the world markets. And it is not profitable to supply oil products to the world markets by the railway of Kazakhstan, and then of Russia due to high transportation costs. Plus customs duties,” Bozumbayev said.

In the future, when gasoline consumption increases in Kazakhstan, only then it will be possible to think about new capacities for oil refining, he said.

“From the point of view of gasoline consumption inside the country, we do not need the fourth refinery,” the minister said.

According to Energy Ministry, the volume of oil refining in the five months of this year at three refineries of the country amounted to 6.7 million tonnes, showing an increase of more than 5% by the same period of 2018. The plan for 2019 is 17 million tonnes. After modernisation, all three refineries have increased processing capacity.