KazMunayGas and CNPC to launch $1.5 billion fertilizer production

KazMunayGas (KMG) and Chinese CNPC will launch urea production at the Zhanazhol gas processing plant site in the Aktobe region. The project budget is estimated at $1.5 billion, and the factory is expected to produce up to 1.2 million tons of urea per year, according to KMG press service.

KazMunayGas CEO Askhat Khassenov has met with CNPC President Hou Qijun during a working visit to China, where they discussed the urea project. Urea is a fertilizer critical for the Kazakhstani gas chemical branch and agriculture. It is a nitrogen-based fertilizer, and Kazakhstan’s demand is between 350,000 and 400,000 tons per year.

In July, KMG and CNPC signed an agreement implying the production of urea and other items. In addition, KMG PetroChem, a KazMunayGas subsidiary, had earlier prearranged with CNPC-AMG to develop a project feasibility study.

For the construction phase, 3,000 workers are expected to be employed, whereas 400 will be hired for plant operations. The companies have already made arrangements with traders and grantors for licenses for urea export technologies.

According to KMG PetroChem’s website, the project is to be fulfilled by 2029. The plan is to process 1 billion cubic meters of raw gas a year to produce urea.

Moreover, KMG and CNPC have discussed exploration and gas processing projects for the Urikhtau field. Discussions have also included Shymkent refinery expansion and the necessary upgrade of the Atyrau-Kenkiyak and Kenkiyak-Kumkol pipelines to increase their capacity.

KazMunayGas has recently announced that Khassenov has held a meeting with Sinopec Chair Ma Yongsheng to discuss joint projects involving $8 billion in investments. These projects will focus on producing polyethylene, terephthalic acid and polyethylene terephthalate (PTA and PET). KMG and Sinopec have already finished their preliminary project feasibility study for the PTA and PET production projects and are now working on moving to the FEED stage. The agenda has also included a discussion of promising geological exploration projects. 

Established in 1988, CNPC (China National Petroleum Corporation) is a leading Chinese oil and gas enterprise as well as the parent company for PetroChina, one of the world’s largest public oil and gas enterprises.

Sinopec (China Petroleum & Chemical Corporation) is the largest Chinese petrochemical company, founded in 2000.