BAKU, Azerbaijan, June 6. China has become a key player in Kazakhstan’s oil and gas sector over the past two decades, particularly in oil transit, according to a recent outlook by Teniz Capital Investment Banking, Trend reports.
Chinese investments, primarily through state-owned CNPC, have been central to building the Kazakhstan-China oil pipeline - the first route for Kazakh oil exports independent of Russia. Since the initial political agreement in 1997, total investment in the pipeline has exceeded $3 billion. Financing has included CNPC equity, loans from international banks, and support from institutions like the EBRD.
In 2023, CNPC and KazMunayGas signed a deal to expand the pipeline’s capacity: Kenkiyak-Kumkol from 10 to 15 million tons and Kenkiyak-Atyrau from 6 to 12 million tons. The preliminary cost of the upgrade is estimated at $200 million.
China directly imports 1-3 million tons of Kazakh oil annually, mostly under CNPC contracts for western Chinese refineries. At the same time, Kazakhstan has become a major transit route for Russian oil to China, with a stable annual volume of 10 million tons since 2017 - roughly 200,000 barrels per day.
CNPC also holds a significant share of Kazakhstan’s oil production, with full ownership of AktobeMunaiGas and stakes in Kashagan and Mangistaumunaigas. Much of this output can be exported to China via the same pipeline system.
Operational coordination between the two countries is managed through a joint commission, and a bilateral agreement exempts the pipeline from customs duties, encouraging stable flows. China has also built a major refinery in Dushanzi with a capacity of 16 million tons per year to process Kazakh oil.
Teniz Capital concludes that China remains a strategic financial and political partner for Kazakhstan, offering investment, infrastructure, and access to the broader Asian market.
