China follows a foreign policy towards strengthen its ties with Central Asian countries. Regional states also trying to develop their improve relations with Beijing. Therefore, steps are being taken to strengthen partnership in various fields. It is seen that one of the most prominent issues among cooperation items is energy sector. While the crisis, which required countries to revise their energy policies due to Russia-Ukraine War, accelerated the existing projects and also affects the emergence of new cooperation plans.
China and Kazakhstan also agreed on the expansion of oil pipelines on May 29, 2023. Kazakhstan’s state oil and gas company KazMunayGas (KMG) and China National Petroleum Corporation (CNPC) discussed the expansion of the two oil pipelines. It is on the agenda to double the capacity of the Kenkiyak-Atyrau Oil Pipeline, from 6 million tons to 12 million tons per year. The capacity of the Kenkiyak-Kumkol Pipeline can be increased from 10 million tons per year to 15 million tons per year.[1] The line expansion project is estimated to cost $200 million and take two to three years.[2]
The Kazakhstan-China Oil Pipeline consists of two parts. First, towards China is the Kenkiyak-Atasu-Alashankou section with an annual oil capacity of 20 million tons. It is designed for the transport of oil to China from the Aktobe and Kumkol oil fields in Western Kazakhstan and for the transit of Russian oil. The other is the Kenkiyak-Atyrau Line with an annual oil capacity of 6 million tons. It transports oil to the Atyrau Refinery and to the system of export pipelines controlled by Russian Transneft through the Atyrau-Samara Pipeline and the Caspian Pipeline Consortium.[3]
The two lines planned to be developed will also form the pillar of the Kazakhstan-China energy partnership. It also has the efficiency to increase the volume of Kazakhstan’s crude oil exports to China. The Kenkiyak-Kumkol Oil Pipeline forms the first part of the Kazakhstan-China Pipeline, which carries crude oil from the West-Kazakhstan and Aktobe oil fields. The maximum capacity of the pipeline is 10 million tons per year and its length is 794 km. The Kenkiyak-Atyrau Line also has a significant impact. KMG announced that in 2022, 4.5 million tons of oil was pumped via Kenkiyak-Atyrau and 8.1 million tons of oil was pumped over Kenkiyak-Kumkol.[4]
It is seen that the last point reached in the energy cooperation between China and Kazakhstan is based on the agreements signed at the C+C5 event held in Xian on May 18-19, 2023. Within the scope of the visit of the President of Kazakhstan, Mr. Kassym-Jomart Tokayev to China, KMG and China’s state-owned energy giant CNPC signed an agreement to expand their strategic cooperation in the oil and gas industry. The agreement includes enhancing cooperation in geological exploration and oil refining, as well as exploring opportunities to increase transport volumes via the Kazakhstan-China Oil Pipeline.[5]
In order to facilitate the energy supply between them, Astana and Beijing have undertaken initiatives in the past years, such as the construction of gas pipelines to provide resources from Kazakhstan to China, the modernization of the domestic oil refinery (Shymkent) and the construction of the domestic gas processing plant (Zhanazhol). Through the ties and partnerships developed, over the years, China has become one of Kazakhstan’s main energy partners.
In this sense, the CNPC has a critical role in the energy cooperation between the two countries. Other Chinese investors active in the energy sector in Kazakhstan include China International Trust and Investment Corporation and China Petroleum and Chemical Corporation. There are also many small private Chinese companies.[6]
Since the 2000s, it has been witnessed that China has increased its ties with Kazakh energy companies. For example, CNPC has bought a 100% stake in PetroKazakhstan. At the same time, Beijing gained control of the South Kumkol Field and purchased a 50% stake in the North Kumkol Field, operated by Turgay Petrol. In addition, CNPC, which purchased an 8.33% stake in Kazakhstan’s Kashagan Caspian Offshore Field, paid over $5 billion for its stake in the North Caspian Operation Company, which is responsible for the development of the Kashagan Field.[7]
As can be seen, China and Kazakhstan are seriously active in the oil and gas sector. The bilateral partnerships that have developed since the beginning of the 2000s continue in different dimensions today. Visiting China for the C+C5 meeting, Mr. Tokayev held several meetings with senior executives of major Chinese companies working on oil and gas, petrochemicals, energy, metallurgy, telecommunications, finance and banking activities, and oil and gas production, processing and transportation. Therefore, it can be interpreted that Kazakh-Chinese relations in the energy sector are at a strategic level. As a matter of fact, in various meetings held during this visit, the commitment to deepen the strategic cooperation between the two countries was reiterated.[8]
On the other hand, it can be understood that the energy partnership between Astana and Beijing, will continue to develop. Chinese investors in Kazakhstan, act with the aim of securing the transportation of energy resources to China. At the same time, there is a Beijing administration trying to maintain its position in Central Asia at the point of meeting the increasing energy need. This situtation reveals that Kazakhstan’s geopolitical importance for China in the context of energy cooperation has increased. Beijing can also make new moves to diversify its energy partnership in order to protect its geopolical interests in the region and in Kazakhstan in particular. The expansion project of the two oil pipelines can also be evaluated in this way.
Consequently, it can be predicted that in the short and medium term, China will continue to take steps to strengthen its energy ties with Kazakhstan. The Astana administration is also pleased with the developing partnership. It can be say that China will make new moves in the energy sector and deepen win-win relations in cooperation with Central Asian countries, whose international role and value has increased within the scope of the Middle Corridor. Because China exhibits an active entrepreneurship in this regard. Therefore, it can be say that CNPC, which has been operating in Kazakhstan for years, has become a symbol in the energy partnershio between the two countries.
[1] “Kazakhstan and China Discuss Expanding Oil Pipelines”, Oilprice, https://oilprice.com/Latest-Energy-News/World-News/Kazakhstan-And-China-Discuss-Expanding-Oil-Pipelines.html, (Date of Accession: 30.05.2023).
[2] “KazMunayGas, CNPC Discuss Expansion of Kenkiyak-Atyrau, Kenkiyak-Kumkol Oil Pipelines”, Interfax, https://interfax.com/newsroom/top-stories/90922/, (Date of Accession: 30.05.2023).
[3] “China and Kazakhstan to Expand Cooperation in Energy Sector”, Kz.Kursiv, https://kz.kursiv.media/en/2023-05-18/china-and-kazakhstan-to-expand-cooperation-in-energy-sector/, (Date of Accession: 30.05.2023).
[4] “Kazakhstan-China Pipeline”, KCP, https://www.kcp.kz/?language=en, (Date of Accession: 30.05.2023).
[5] “KasMunayGas and CNPC Sign Aggreement on Expanding Strategic Cooperation”, KasMunayGas, https://www.kmg.kz/en/press-center/press-releases/kmg-i-cnpc/, (Date of Accession: 30.05.2023).
[6] İbid.
[7] İbid.
[8] “Kazakhstan and China Reach New Level of Partnership, Launch New Investment Projects”, Astana Times, https://astanatimes.com/2023/05/kazakhstan-and-china-reach-new-level-of-partnership-launch-new-investment-projects/, (Date of Accession: 30.05.2023).
