Kazakhstan extends deal to transit Russian oil to China

Kazakhstan has extended a deal to transit Russian oil to China up to Jan. 1, 2034, pipeline operator Kaztransoil said May 15.

Exports to Asia have become more important for Russia since it invaded Ukraine in February 2022, triggering Western sanctions that limit access to most of its traditional buyers in Europe.

The deal with Rosneft covers supplies of 10 million mt/year, equivalent to around 200,000 b/d. The extension will become effective when amendments are approved to the intergovernmental agreement on oil transit to China dated Dec. 24, 2013, Kaztransoil said.

Rosneft did not immediately respond to a request for comment.

Tariffs on the supplies will remain the same. These are set at $15/mt, excluding value added tax, for supplies between Russia and Kazakhstan entering at Piirtyshsk and onward to Alashankou in China via Atasu. This includes supplies from Russia to Kazakhstan at $4.23/mt excluding VAT and Kazakhstan-China at $10.77/mt, excluding VAT.

In January-April 2023, KazTransOil JSC transited 3.2 million mt of Russian oil to China, Kaztransoil said.

Kazakhstan also transits Russian oil to Uzbekistan. Kaztransoil said previously that it transited 10,700 mt, or around 118,000 b/d in the first quarter of 2023. A further 14,200 mt were shipped in early April, the company said.

Russia first started shipping oil to Uzbekistan via Kazakhstan in 2017, supplying 67,900 mt that year. No supplies via the route were carried out during 2019-2022. Supplies are carried out at a tariff of $25.12-$27.9/mt, Kaztransoil said.

Separately, Kaztransoil said May 16 that supplies of oil from Kazakhstan to Germany via the Druzhba pipeline operated by Transneft and running through Russia rose 30,000 mt, or 150% on the month to 50,000 mt in April.

Kaztransoil said it is technically possible to transport 1.2 million mt of Kazakh oil via Druzhhba to Germany, but actual volumes depend on oil producers' requests.