KazMunayGaz to send its oil to Germany in January 2023

KazMunayGaz (KMG), a Kazakhstani oil company, has confirmed its plan to start sending oil to Germany’s Schwedt refinery. The refinery used to buy Russian oil but now seeks out new suppliers, according to the KMG press service.

«The president has ordered us to test a new exporting route to Germany. We are going to send the first bunch of oil in January 2023,» said Magzum Mirzagaliyev, CEO of KMG.

Mirzagaliyev has already discussed this issue with Michael Kellner, the Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action via online video call. He also met with Christian Görke, a Member of Germany’s Bundestag in Astana. During these talks, the head of KMG confirmed that the company can send its oil to Germany via the Druzhba pipeline right after the contract and technical issues are solved.

Germany is interested in stable supplies of Kazakhstani oil to the refinery in Schwedt, which has a capacity of 10 million tons of oil per year. The enterprise is a key supplier of oil products in most of Eastern Germany, including Berlin.

According to Mirzagaliyev, almost all oil being produced by KMG subsidiaries is sent to domestic refineries in order to make sure that the country has enough gasoline and other oil products. In terms of oil exports, KMG mainly sends its oil to two refineries in Romania. They are controlled by the company and supply oil products throughout Europe. Moreover, KMG has some other long-term export obligations and uses the remaining oil to meet those commitments.

However, Kazakhstan’s Minister of Energy Bolat Akchulakov says that the country can send to Germany about seven million tons of oil a year. The key pipeline that connects oil fields in Kazakhstan with consumers in Europe is the Atyrau-Samara pipeline with a capacity of 10 million tons of oil per year. It is connected to the system of oil pipelines called Druzhba. Another pipeline that stretches from Kazakhstan to Makhachkala has a capacity of two million tons. With the help of these pipelines, Kazakhstan can export 12 million tons of oil per year: 5 million tons to Romania and 7 million to other consumers in Europe. 

In September, Germany’s Ministry of Economy designated the Federal Network Agency (Bundesnetzagentur or BNetzA) as a trust manager of Rosneft Deutschland GmbH (RDG) and RN Refining & Marketing GmbH (RNRM), subsidiaries of the Russian Gazprom in Germany. As a result, BNetzA has gained control over Gazprom’s shares in three German refineries: PCK Raffinerie, Schwedt (54.17%), MiRO, Karlsruhe (24%) and Bayernoil, Vohburg (28.57%).