Kazakhstan raises tariff for transit of Russian oil

KazTransOil, a subsidiary of KazMunayGas, has revealed its plan to raise the tariff for the transit of Russian oil via the Kazakhstani sector of the Tuymazy-Omsk-Novosibirsk-2 pipeline (TON-2) by 20.9% from about $9.33 to $11.28 per ton for 1,000 kilometers (VAT excluded) starting from 2024.

«Starting from January 1, 2024, the tariff for KazTransOil services on the transit of Russian oil via the TON-2 pipeline that also goes through the territory of the Republic of Kazakhstan will be at $11.28 per one ton for 1,000 kilometers (VAT excluded). The director general of KazTransOil has approved the new tariff,» the company said in a statement.

The current tariff for oil transit of 4292.4 tenge ($9.33) per ton for 1,000 kilometers hasn’t changed since April 1, 2018.

The TON-2 pipeline stretches through the territory of Russia and Kazakhstan (186.25 kilometers). With the help of this pipeline, Kazakhstan supplies oil to its Pavlodar refinery and ensures transit of Russian oil to China and Uzbekistan.

On May 15, 2023, KazTransOil said that it reached a deal with Rosneft and extended its contract on transit of 10 million tons of Russian oil passing through Kazakhstan to China via the Atasu-Alashankou pipeline for $15 per ton until 2034. This pipeline is part of the pipeline system that connects oil fields in Western Kazakhstan with the Chinese town of Alashankou near the state border with Kazakhstan. The pipeline is controlled by the Kazakhstan China Pipeline, a joint venture of KazTransOil (50%) and China National Oil and Gas Exploration and Development Company Ltd. (50 %). The Atasu-Alashankou pipeline has an annual capacity of 20 million tons of oil.

On February 1, 2023, Kazakhstan increased the tariff for the transit of Russian oil to Uzbekistan from $25.12 to $27.9 per ton (VAT excluded).

In 2024, Russia plans to boost its oil exports to Uzbekistan via the territory of Kazakhstan by up to 500,000 tons compared to 154,000 tons booked for the current year, according to Abay Beysembayev, head of the transportation department of KazTransOil.

«Sanoat Energetika Guruhi (Uzbekistan) has already sent a request to KazTransOil asking to execute the transit of 500,000 tons of Russian oil to Uzbekistan. Moreover, this amount of oil transit may be increased to one million tons,» the official said during Issuer’s Day at the Kazakhstan Stock Exchange (KASE).

Over the period from January to October 2023, KazTransOil facilitated the transit of 104,000 tons of Russian oil to Uzbekistan. This year, the total amount of this transit is going to reach 154,000 tons.

However, in the third quarter, KazTransOil reported that the transit of Russian oil to Uzbekistan dropped to 31,100 tons compared to 37,900 tons in the second quarter.

«In Q3 2023, KazTransOil transported 31,100 tons of Russian oil through the territory of the Republic of Kazakhstan to the Republic of Uzbekistan via the Omsk-Pavlodar-Shymkent pipeline and an oil-loading rack at the Shagyr railway station,» the company said in a statement.

Russia has been exporting its oil to Uzbekistan since 2017. At the time, the amount of oil exports was about 67,900 tons. The next year, the oil exports to Uzbekistan plunged to 36,000 tons. Over the period from 2019 to 2022, the transit of Russian oil to Uzbekistan through Kazakhstan was suspended.