Kazakhstan's 40 Million Ton Refining Goal Hinges on Domestic Market Incentives

Kazakhstan aims to increase its oil refining capacity to 40 million tons per year by 2040, but achieving this goal will require more than just expanding existing refineries and building a new one.

According to Nurlan Zhumagulov, Executive Director of Energy Monitor Fund, the country needs to address the economic incentives that currently make crude exports more attractive than supplying some oil to domestic refineries.

The current price difference between export and domestic prices is significant: $550 per ton for exports versus $264 per ton for domestic sales.

Zhumagulov notes that Kazakhstan's largest producing projects, including Tengiz, Kashagan, and Karachaganak, account for 70% of total oil production but do not supply crude to the domestic market due to economic reasons.