Increase in tolling volume of Kazakh oil to China depends on the throughput capacity of the Kazakhstan-China transport passage, the CEO of "KazMunaiGas" - refining and marketing JSC, Daniyar Tiyesov told Trend.
"Today tolling operations conducted with China, and high-octane gasoline from our oil, produced in Chinese refineries sent to us. But the issue of increasing volumes of oil products from China is not associated with the supply of raw materials and logistics. There are limits on throughput capacity of Kazakhstan-China transport passage," he said.
Tiyesov noted that there are problems with the tolling of oil.
"Tolling is an experince anyway. Sometimes it is successful, but sometimes there is a problem. Nevertheless, we are dealing with logistics and think that a solution will be found," General Director of JSC said.
Oil is sent to China through a pipeline, and processed products are transported back by automobile transport, as there is no railway between two countries.
It was previously reported that Kazakh government decided to hold tolling operations with China, in order to solve the fuels and lubricants deficit during peak periods. Two years ago, Sauat Mynbayev, the then oil and gas minister of the country, said that 1.5 million tons of Kazakh oil will be exported to China for oil processing.
The oil products obtained at Chinese refineries from Kazakhstan's crude oil will be transferred back to Kazakhstan to partially remove the dependency on sudden fluctuations in fuel and lubricant prices in Russia. About 30 percent of high-octane gasoline comes to Kazakhstan from Russia.
The processing of Kazakh oil at Chinese PetroChina refinery, as well as at the Dushanzi plant, which receives Kazakh oil within tolling operations, currently costs 154.41 yuans ($25.5) per ton, according to the Kazakh Agency for Research of Investment Profitability.
It is planned to export 200,000 tons of Kazakh oil to China in 2014 for tolling (processing of foreign raw materials, followed by export of the ready product), according to Kazakh Ministry of Oil and Gas
Some 338,919 tons of Kazakh oil were processed at the Chinese plants in 2012-2013.
The products obtained by means of oil refining are supplied to the domestic market during tolling, and that is why these operations with China have been given the status in Kazakhstan's tax legislation that is same as the supplies of Kazakh oil to domestic oil refineries.
Kazakh oil refiners believe that tolling with China is not so topical today for Kazakhstan. The reduction in Kazakh oil supplies from 1.5 million tons to 200,000 tons over two or three years is associated with this.
Translated by S.I. and E.A.
Edited by C.N.