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Yahoo
a day ago
- Business
- Yahoo
How can Kazakhstan secure its hydrocarbon export infrastructure?
Kazakhstan is one of the largest oil and gas producers in Central Asia, a significant producer of coal and a major energy exporter – but the markets surrounding it are shifting. In terms of oil production, the vast landlocked country is up against established and well connected heavyweights such as Saudi Arabia and the US, while competition in the gas market is more regionalised, with Russia, Turkmenistan and Uzbekistan as frontrunners. Its production remains on a sharp upward trajectory. In February, Kazakhstan reported a record oil output of 2.12 million barrels per day (mbbl/d), and announced plans to produce 96.2 million tonnes (mt) of oil and gas condensate in 2025, a yearly increase of almost 10%. Moreover, its oil production in the first half of 2025 (H1 2025) saw a yearly surge of almost 12%. However, the nation still has some way to go to diversify its export routes and establish reliable and long-term export markets. Demand from various regions of Europe continues to rise against the backdrop of the Russia-Ukraine war, following an international trend of nations seeking to reduce their energy dependence on Russia. In June, the European Commission proposed a gradual phase-out of Russian gas and oil imports into the EU by the end of 2027, as part of the REPowerEU road map, which aims to ensure the EU's full energy independence from Russia. Kazakhstan is aiming to capitalise on this demand by increasing hydrocarbon exports. Currently, approximately 80% of the country's oil exports are transported via the majority Russia-controlled Caspian Pipeline Consortium's (CPC) Black Sea terminal, which was temporarily restricted in April by Russian regulators. Kazakh hydrocarbon infrastructure has also become collateral damage in the ongoing Russia-Ukraine war. In February, Ukrainian drones hit a pumping station on the main Kazakh oil export pipeline, temporarily dropping oil flows through the CPC by approximately 30–40%. Such vulnerability is exacerbated by Kazakhstan's Soviet-era assets, although the country has been actively building new facilities and reviving previously shelved plans such as the Eskene-Kuryk-Baku oil pipeline, which will extend for 739km from Kazakhstan to Azerbaijan. Market expansion, particularly to hydrocarbon-hungry countries such as China and Türkiye, remains a priority for Kazakhstan, helping it secure its economic future. However, this process relies on reliable pipeline routes and stabilised geopolitical climates, the latter currently seeming a long way off. Market opportunities and challenges As the world's biggest hydrocarbon importer, China offers huge opportunities for Kazakhstan. In February, state-run gas pipeline operator Qazaqgaz extended its agreement with PetroChina to increase gas exports to the east. Qazaqgaz has a pipeline network of more than 76,000km, including 20,000km of main gas pipelines, which also transport Russian gas to Uzbekistan and Kyrgyzstan through an agreement signed with Gazprom in 2024. However, extracting itself from Russia's influence and strengthen its ties with China could prove tricky for Kazakhstan. Much of the region's hydrocarbon infrastructure is co-owned and operated by more than one country, with a notable example being the Atasu-Alashankou pipeline, which carries both Kazakh and Russian oil to China. Competition in the region is fierce for market access and infrastructural planning. Kazakhstan is China's third-largest pipeline gas supplier after Russia and Turkmenistan, but in terms of crude oil the country has fallen behind other suppliers, with a 50% drop from 2023 to 2024 (though overall demand from China has weakened in recent years). Elsewhere in Asia, Türkiye holds further promise. GlobalData oil and gas analyst Rami Khrais highlights the Baku-Tbilisi-Ceyhan (BTC) pipeline, which enables Kazakhstan to bypass Russia and carry crude oil through Azerbaijan and Georgia to Türkiye and other Mediterranean ports. According to reports, Kazakhstan is already diverting its crude exports away from Russia and towards Türkiye through the BTC: in February, 6,000 tonnes of oil from the Kashagan field began to move through the pipeline for the first time. However, Khrais states that Kazakhstan's "plans to reduce dependency on the Russian route might not be easy [and] due to logistical complexities, transporting oil by sea and then through the BTC pipeline is likely to be more expensive than transporting it via the CPC". Meanwhile, South Asia is a relatively untapped market for Kazakhstan. Research from the Journal of Eurasian Studies highlights that Kazakhstan could be of great use to India as an energy provider, particularly as India is heavily dependent on oil imports. While Kazakhstan does export hydrocarbons to India (amounting to a value of $175m for crude oil in 2024) as its largest trade partner in Central Asia, no direct infrastructure connection exists. The International North-South Transport Corridor, which would use the Chabahar and Bandar Abbas ports in Iran, presents a possibility for further connection between the countries. The corridor is designed to facilitate the movement of goods between Azerbaijan, Central Asia, Europe, India, Iran and Russia. According to the Social Policy Research Foundation in India, another key barrier to cooperation with Kazakhstan is China's established presence in Central Asia, as it has "a territorial advantage and has arguably solved the issue of decaying regional infrastructure by building multiple pipelines […] for an entrenched competitive advantage". Despite the geopolitical mire, there are viable options for Kazakhstan to secure its hydrocarbon infrastructure, including strengthened regional cooperation and transportation development. New frontiers for Kazakhstan's hydrocarbon exports Given the complications of pipeline expansion, maritime transportation presents another avenue for Kazakhstan to capture a wider market. In recent years, state-run companies such as KazMunayGas have ramped up investments in tankers to increase exports across the Caspian Sea. Notably, the BTC pipeline relies on a fleet of Kazakh tankers to move oil to Azerbaijan. Kazakh Energy Minister Almasadam Satkaliyev has highlighted the potential to increase the BTC's current output of 1.5mt per year to as much as 20mt, thus reducing oil exports via Russia by approximately 80%. Increased cooperation with Azerbaijan is another possible diversification element for Kazakhstan, which would make it something of a regional energy hub. While a Trans-Caspian oil pipeline remains out of reach due to technical and financial challenges, the countries recognise the mutual benefits of cooperation, such as negotiating port modernisation to facilitate enlarged fleets. In turn, this will open up further access to European markets. Lack of investment taking its toll However, Kazakhstan must also assess how it can solve the problem of declining foreign direct investment flows (FDI), which are intertwined with oil and gas. Kazakh Invest, which attempts to bolster Kazakhstan's economy by drawing in foreign investment, has stated that FDI plummeted from $2.3bn (KZT1.22trn) to $72.9m over the first nine months of 2024, year-on-year. The completion of large-scale infrastructure projects such as the Tenzig oilfield, which began production in January and is owned by Chevron (50%), KazMunayGas (20%), ExxonMobil (25%) and Lukoil (5%), has been cited as a significant factor. According to the International Trade Administration, "the hydrocarbons sector, since 1991, has received approximately 60% of FDI in Kazakhstan, and constitutes approximately 53% of its export revenue". As part of its National Investment Policy, the Kazakh Government is aiming to attract at least $150bn of FDI by 2029 and diversify away from hydrocarbons into agriculture, construction, ecology, information technology, pharmaceuticals and tourism. However, business research from 2024 found that the "sheer weight of oil and gas production within the Kazakh economy will limit the potential for investment diversification". Kazakhstan still leads FDI in Central Asia, particularly in greenfield projects, as per the UN Conference on Trade and Development's (UNCTAD) 2025 World Investment Report. Throughout 2024, gas supply pulled in significant FDI, with UNCTAD highlighting the $5.5bn natural gas facility announced by Qatari-based energy, concessions and construction company UCC. Russia's influence can also be felt in FDI, with inflows totalling $931.9m (Rbs72.88bn) over the first six months of 2024. As hydrocarbon FDI is likely to remain predominant in Kazakhstan, improving existing infrastructure and strengthening regional partnerships appears to offer the most security. In the meantime, Kazakhstan continues to pump out oil and gas, repeatedly exceeding its 1.47mbbl/d output quota under OPEC+ production limits. Much of the country's future export landscape will depend on delicately managing its geopolitical standing and building links (both political and physical) to the nations around it. "How can Kazakhstan secure its hydrocarbon export infrastructure? " was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Euractiv
a day ago
- Business
- Euractiv
Budapest claims deal with Belgrade, Moscow on new pipeline for Russian oil
Hungarian Foreign Minister Péter Szijjártó has announced an agreement with 'Serbian and Russian colleagues' to build a new oil pipeline between Serbia and Hungary, aimed at consolidating imports of Russian crude oil – just as the EU moves to finally freeze the Kremlin out of its energy market. In a typically provocative social media post on Monday, Szijjártó blamed the EU's ongoing efforts to prohibit Russian fossil fuel imports for driving up energy prices to 'several times' those in other parts of the world. 'And this is no wonder, given Brussels is forcibly dismantling energy ties, banning Russian energy sources and blocking supply routes,' Szijjártó wrote on social media. The move comes as the EU actively seeks to close off the remaining imports of Russian gas – flows that, although substantially reduced since the full-scale invasion of Ukraine in 2022, still provide considerable revenue for the Kremlin's unprovoked war against its smaller neighbor. Legislators are currently negotiating a proposal to ban imports of Russian gas completely by 2027. The European Parliament's lead negotiator is also pushing to extend the prohibition to pipeline oil, while also bringing forward the deadline. The announcement from Budapest came after a video conference between Szijjártó, Russian Deputy Energy Minister Pavel Sorokin, and Serbian Energy Minister Dubravka Đedović, the state-controlled news agency MTI reported. The proposed pipeline could be operational as early as 2027, MTI reported, although few details were provided about the nature of the agreement with Moscow and Belgrade. In a video clip included in the report, Szijjártó – whose government, led by Prime Minister Viktor Orbán, has long made capping domestic energy bills a key element in election campaigning – reiterated his criticism of EU energy policy. 'We will not allow this,' Szijjártó said. 'We will build pipelines and open up new sources of supply, and so maintain Europe's lowest energy bills for the Hungarian people.' According to recent statistics, Hungarian households have the lowest gas bills in the EU at €3.20 per 100 kWh compared to €16.71 in the Netherlands and €18.93 in Sweden. Hungary and neighbouring Slovakia have repeatedly obstructed EU attempts to impose economic sanctions on Russian oil and gas, where unanimity among all 27 EU member states is required. However, the REPowerEU package currently under negotiation between governments and the European Parliament would require only a qualified majority to pass into law. (aw)
Canada News.Net
7 days ago
- Business
- Canada News.Net
European gas reserves sink below normal Bloomberg
Heat waves in the EU and Asia have driven consumption up and fueled competition for global shipments, the outlet has stated Europe's natural gas inventories are particularly low for this time of year, Bloomberg has reported, citing rising demand for air conditioning amid a regional heatwave. Underground storage sites are currently around 62% full, the outlet stated, while typically reserves reach around 80% by early summer, helping ensure a robust buffer ahead of the winter heating season. Extreme heat in Asia has also caused fuel shipments to be diverted away from Europe, as buyers worldwide compete for limited supplies. As a result, European natural gas futures have hovered near a two-week high, meaning "the continent needs to pay up to keep supply coming," the outlet wrote. Despite the trend, the EU may still be able to top up its gas inventories to about 80% by the end of the summer, the outlet quoted a note by Goldman Sachs as saying. The EU imports nearly 90% of its natural gas, with Russia still accounting for a significant share in the supply despite sanctions. In May, European Commission President Ursula von der Leyen unveiled a plan to phase out all Russian oil and gas imports by the end of 2027, as part of the EU's REPowerEU roadmap, which aims to eliminate the bloc's dependence on fossil fuels from the country and shift to renewable sources. The plan has drawn criticism from landlocked Hungary and Slovakia, which have relied heavily on Russia's pipeline gas. Bratislava blocked the EU's 18th sanctions package, targeting Russia's energy and financial sectors, citing risks of shortages and rising prices. Budapest has joined the veto, and is pressuring the block to make concessions related to energy and broader RepowerEU rules. Moscow has argued that the EU restrictions are self-defeating, causing surging energy prices and weakening the bloc's economy. Since 2022, Germany, the bloc's largest economy, has fallen into recession, while growth across the EU has stalled.
Russia Today
14-07-2025
- Business
- Russia Today
European gas reserves sink below normal
Europe's natural gas inventories are particularly low for this time of year, Bloomberg has reported, citing rising demand for air conditioning amid a regional heatwave. Underground storage sites are currently around 62% full, the outlet stated, while typically reserves reach around 80% by early summer, helping ensure a robust buffer ahead of the winter heating season. Extreme heat in Asia has also caused fuel shipments to be diverted away from Europe, as buyers worldwide compete for limited supplies. As a result, European natural gas futures have hovered near a two-week high, meaning 'the continent needs to pay up to keep supply coming,' the outlet wrote. Despite the trend, the EU may still be able to top up its gas inventories to about 80% by the end of the summer, the outlet quoted a note by Goldman Sachs as saying. The EU imports nearly 90% of its natural gas, with Russia still accounting for a significant share in the supply despite sanctions. In May, European Commission President Ursula von der Leyen unveiled a plan to phase out all Russian oil and gas imports by the end of 2027, as part of the EU's REPowerEU roadmap, which aims to eliminate the bloc's dependence on fossil fuels from the country and shift to renewable sources. The plan has drawn criticism from landlocked Hungary and Slovakia, which have relied heavily on Russia's pipeline gas. Bratislava blocked the EU's 18th sanctions package, targeting Russia's energy and financial sectors, citing risks of shortages and rising prices. Budapest has joined the veto, and is pressuring the block to make concessions related to energy and broader RepowerEU rules. Moscow has argued that the EU restrictions are self-defeating, causing surging energy prices and weakening the bloc's economy. Since 2022, Germany, the bloc's largest economy, has fallen into recession, while growth across the EU has stalled.
Gulf Insider
08-07-2025
- Business
- Gulf Insider
Lights Out, Europe: The Cost Of Brussels' Energy Fantasy
Spain's leading energy companies – Iberdrola, Endesa, and EDP – remain stunned. After the nationwide blackout that cut power across Spain on April 28, the government has yet to provide a clear explanation or take technical responsibility… The companies, represented by the employers' association Aelec, have denounced 'surprising omissions' in the official investigation. They demand that the extreme voltage spikes recorded in the days leading up to the collapse be included in the analysis. They have criticized the preliminary report from ENTSO-E—the European network of electricity operators—for claiming that 'the system was operating normally' just seconds before the failure. Meanwhile, severe voltage swings were recorded, going beyond safety limits and triggering automatic shutdowns of high-voltage substations and key refineries. This episode is far more than an isolated incident. It is a metaphor for the erratic direction taken by the European Union's energy policy. In the name of climate change, Brussels has embarked on a radical overhaul of its energy model driven not by technical or economic realities, but by an ideological agenda imposed by political and bureaucratic elites. What was marketed as a smooth transition toward renewable energy has turned into a forced green agenda, with no viable alternatives and little regard for its impact on competitiveness, system stability, or citizens' well-being. At the root of this drift lies the REPowerEU plan, launched after the start of the war in Ukraine with the stated aim of 'fully decoupling' Europe from Russian energy. What initially appeared to be a justified geostrategic measure quickly became, in the hands of the European Commission, a pretext to push through renewable energies at any cost. This led to a rushed and uneven transition, with citizens and businesses footing the bill. This leap into the void has destabilized key sectors such as agriculture, transport, and industry, forcing them to absorb rising costs without receiving real technological upgrades. Countries like Germany, which shut down their nuclear plants out of political conviction, have now had to reopen coal-fired stations in a contradictory reversal. Meanwhile, state propaganda continues to promote green energy self-sufficiency, while households face record electricity bills and companies lose competitiveness. The structural failures of the European power grid are becoming increasingly evident. The continental grid was designed for stable and predictable hydro, gas, and nuclear sources. The mass introduction of intermittent sources like wind and solar makes imbalances difficult to manage: without wind or sun, generation collapses; with too much, the grid becomes dangerously overloaded. On April 28th, the Iberian Peninsula experienced those consequences firsthand. Abnormal voltage levels were detected in several substations throughout the morning. To grasp the gravity: a 'voltage oscillation' involves a sudden and significant fluctuation in the grid's voltage, which can damage equipment, trigger automatic disconnections, or, in extreme cases, cause a total blackout. At the Lancha substation, voltage reached nearly 250 kV on a line rated for 220. Another line, rated at 400 kV, surpassed 470 kV just before the collapse. According to Aelec, these anomalies began as early as 10:00 a.m. While a sudden drop of 2,200 MW in generation has been cited as the trigger, the system is theoretically built to withstand a loss of up to 3,000 MW without shutting down. This was not a coincidental failure—it was a built-in weakness. Beyond technical and political issues, the forced energy transition takes a human toll. European households are paying more for electricity, hitting middle- and lower-income families especially hard. Electrification of transport, promoted without adequate foresight, is raising the cost of mobility due to a lack of reliable charging infrastructure. Farmers and truckers, already squeezed by unmanageable climate regulations, face growing expenses while being pressured to make investments they cannot afford. Moreover, blackouts are no minor issue: their impact ranges from multimillion-euro industrial losses to the paralysis of hospitals, schools, and transport networks. In Spain, the outage even cost five people their lives. An energy model that cannot ensure a steady supply threatens the economy and public safety. European industry, particularly in the central and southern parts of the continent, is already bearing the brunt. Unable to compete with American or Asian energy prices, many companies are relocating production or shutting down. Paradoxically, even sectors the green agenda promotes, such as electric vehicles, are faltering. Once-dominant car industries in Germany and France are struggling to stay afloat in an increasingly competitive global market. While Europe imposes ideological standards, China manufactures more, better, and cheaper. Deindustrialization is no longer a threat—it's a fact. Notably, some factions on the Left even embrace 'degrowth'—deliberate economic decline—as a desirable path. Worse still, despite all these sacrifices, Europe continues to import Russian energy—now via third countries—and remains vulnerable to geopolitical pressure. The promise of energy independence often rings hollow. The Green Deal has morphed from a promise of modernization into a political myth: a story no longer grounded in reality, propped up by propaganda that refuses to confront its contradictions. The public, increasingly aware of the real costs, is beginning to push back. The farmers' resistance in the Netherlands gave rise to a political party now part of the ruling coalition. In other countries, protests and citizen discontent are multiplying. And this is only the beginning. This very week, farmers returned to Brussels to protest the suffocating policies they face. An energy transition is not inherently harmful, but cannot be imposed dogmatically. It requires realism, technological pluralism, gradual implementation, and a willingness to adopt what works. Nuclear, hydro, and natural gas must be part of the energy mix while green technologies mature. Sustainability will not be achieved by denying physics or punishing citizens, but by integrating every available tool with a long-term vision. What happened in Spain is a symptom, not an accident. Europe's current energy model is not equipped to operate under the conditions imposed by Brussels. There is an urgent need to rethink energy policy—not through ideology, but through engineering, economics, and common sense. If the energy transition is to be our path forward, let it be pursued with caution, technological plurality, and respect for the system's real limitations. Europe cannot afford to stumble in the dark in the name of a green light; it still does not know how to switch on.
