Atyrau Refinery Relies on a Russian Bank to Refinance a Foreign Currency Loan

The Atyrau Refinery of the national company KazMunayGas (KMG) has received a 38.2 billion loan in Russian rubles ($528 million) from VTB Group, a large bank owned by the Russian government, according to the KMG’s press service. 

The national company has issued a corporate guarantee to ensure the fulfillment of obligations. The funds will be used to refinance a foreign currency loan taken from the Export-Import Bank of China to upgrade the refinery plant.

As KMG noted the deal with the Chinese bank was carried out during the pandemic last year and is now closed. The agreement with VTB allows the company to optimize and diversify its loan portfolio.

According to Aidar Kaliyev, Senior Vice President of VTB the deal with KMG is the largest deal VTB has made in the oil and gas sector of Kazakhstan. Now the bank is going to offer many other oil companies to embrace that opportunity and get access to a promising and capacious market for loans nominated in Russian rubles.

At the end of October KMG announced that the overhaul of the Atyrau refinery is going to be postponed until 2022 due to a deficit of fuel, particularly diesel fuel on the domestic market.

Atyrau Refinery is a subsidiary of KMG. In 2010-2017 the plant went through modernization. As a result, the refinery produces fuel and other products which meet the ecological classes of K4 and K5. The capacity of the Atyrau oil plant has also been increased by 500,000 tons up to 5.5 million tons per year.