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China's Export-Import Bank has agreed to provide a $1.13bn loan to Kazmunaigas to finance the Kazakh company's renovation of the Atyrau refinery. The deal is part a Beijing's accelerating drive to use its massive reserves to expand investment and market share across Eurasia.

The loan was announced on June 6, during a summit of the Shanghai Cooperation Organisation (SCO) - a military security organization led by Russian and China and including Kazakhstan Kyrgyzstan, Tajikistan, and Uzbekistan - in Beijing At the same meeting, China announced a wider plans to extend $10bn in loans to its fellow SCO member countries "to stimulate their economic development and support economic cooperation projects," Chinese President Hu Jintao said, according to Ria Novosti.

He also announced plans to set up a SCO development bank, and called on members to boost efforts to create a united transport infrastructure, a network of highways and railroads, develop air travel, telecommunications, as well as a common oil and gas transportation system.

The establishment of the credit line for infrastructure in Central Asia reflects an announcement by Chinese Premier Wen Jiabao in April that Beijing is to set up a €10bn credit line for similar projects in Central and Eastern Europe. Holding the world's biggest reserves as the crisis in Europe starts to sink global investment and credit, China is now putting its $3 trillion treasure chest to work to build stronger positions in both the energy rich markets of Central Asia, and the EU - its biggest trading partner.

Back in Kazakhstan, as part of plans to upgrade its oil & gas infrastructure, Kazmunaigas is building a new facility at Atyrau - one of the country's three main refineries - which will boost production and allow it to produce cleaner fuel. The project will cost a total of $1.68bn.

When completed, the aging refinery will be able to produce high-octane gasoline, jet fuel and diesel compliant with Euro-5 emissions standards, Reuters reports. Work is due to be completed within the next 41 months, and is being carried out by China Petroleum & Chemical Corp, Marubeni Corp. and KazStroyService.

Visor Capital notes that, "[t]he availability of funds is positive, as it helps progress the plan for upgrading the Atyrau refinery which could have proved difficult using standard commercial financing, and helps alleviate the capex burden for KMG." Kazmunaigas also plans to upgrade the country's other two main refineries, at Pavlodar and Shymkent, by 2015.