Russia and Kazakhstan extend their oil transit agreement

Kazakhstan wants to extend its agreement with Russia related to oil transit to China. The two countries should now update the protocol to the agreement. The draft document of the protocol has already been published by the government in order to get public feedback.

In an explanatory note to the draft, document authorities said that Russian Rosneft on the one hand, and the Ministry of Energy of Kazakhstan on the other hand, have to revise the existing agreement in terms of volume of the transit and price.

“The two parties create necessary conditions for long-term transportation of Russian oil by the Russian authorized organization in the amount of 10 million tons per year and guarantee free access to the Tuymazy – Omsk –Novosibirsk-2 – Priirtyshsk – Atasu – Alashankou pipeline,” the draft protocol says.

According to the document, the Russian oil transit toll is $2.10 per ton, although the payments should be made in Kazakhstan’s currency tenge based on the exchange rate set by the National Bank on the date of payment.

The agreement is going to last until January 1, 2034, while the draft protocol will be available for review and comments until August 1, 2023. Given that Russia is planning to export 10 million tons of oil per year, Kazakhstan will make a profit of $210 million over the next ten years.

In May 2023, KazTranOil, a national company that runs oil pipelines in Kazakhstan, renewed its agreement with Rosneft on the transit of 10 million tons of oil per year toward China.

The previous agreement between the two countries was signed on December 24, 2013, by Ex-President Nursultan Nazarbayev. The initial amount of the transit was seven million tons of oil. Later, the two sides agreed to increase the amount of oil transported to China via Kazakhstan.