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Transportation and Sales
Since Kazakhstan is essentially a landlocked nation, increased export production necessitates an upgraded transportation system. Fortunately, over the past few years, this infrastructure has undergone significant development. The parent company’s strong relationships give Zhanaozen Oil Refinery dependable access to pipeline infrastructure. The UAS and CPC pipelines are important export markets for the company. The main supplier to the Atyrau refinery is Zhanaozen Oil Refinery. China receives crude oil from Kazgermunai via a pipeline connecting the two countries.
Up until recently, Samara, which serves as the company’s primary export outlet, was reached by the 1,500 km Uzen-Atyrau-Samara (UAS) pipeline through Russia. This has been supplemented since 2008 by the 1,510 km pipeline built by the Caspian Pipeline Consortium (CPC) to the Russian city-port of Novorossiysk on the Black Sea, which is why we are working to increase the percentage of exports through CPC as it is a more lucrative route for the company.
A 1,000 km pipeline connecting Kazakhstan and China called Atasu-Alashankou went into operation in December 2008 with a capacity of 10 million tonnes per year (200 kbopd), which is expected to double in the following years. From Kazakhstan, alternative pipeline routes are being considered. A different route was created in July 2009: the first direct pipeline linking the Caspian Sea and the Mediterranean Sea, with a capacity of 50 million tonnes (1,000 kbopd). The Baku-Tbilisi-Ceyhan pipeline, which connects the Turkish port of Ceyhan with Baku in Azerbaijan, started operating in July 2010. This pipeline offers Kazakhstan’s oil a potential alternate route.
The aforementioned instances show that, despite Kazakhstan’s reliance on its neighbors to export its oil abroad, the nation enjoys a significant increase in and diversification of its access to the export market. The Company has guaranteed access to the oil transport infrastructure owned by Zhanaozen Oil Refinery thanks to our positive relationships with our parent company. 59% of the crude oil produced on Zhanaozen Oil Refinery’s primary assets, UMG and EMG, were exported in 2016. 26% of the Company’s (UMG and EMG) crude oil sales during this time were exported via the CPC pipeline, and 33% were exported via the UAS pipeline.