Kazakhstan may start oil processing on tolling basis this year.

By bne IntelliNews October 5, 2012
Kazakhstan is likely to start oil processing on tolling basis this year, deputy oil and gas minister Bolat Akchulaukov has said. The volumes of the oil will reach 1-1.5mn tonnes per annum. Kazakhstan has already adopted the relevant law base of the operation and is presently concluding talks with China over the issue. Kazakh oil will be processed on Dushanzi refinery controlled by CNCP. The facility has an annual capacity of 16mn tonnes of oil and is located in China's Xinjiang Uyghur autonomous region. Under the tolling scheme, Kazakhstan will receive high specification gasoline and diesel oil to satisfy domestic demand. Kazakhstan has 3 large refineries with a combined capacity of 14.5mn tonnes. The local oil products output is too low to satisfy domestic demand thus Kazakhstan was forced to import oil products from Russia. In recent year however, Kazakhstan and Russia went into argument over the issue and Astana started to look for alternative ways for oil deliveries. If agreement with China is implemented, Kazakhstan may resign from oil products imports from Russia.

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