Kazakhstan Oil and Gas Downstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Kazakh oil and gas downstream market is expected to register a CAGR of approximately 3.78% during the forecast period.

The market was negatively impacted by COVID-19 in 2020. Presently, the market has reached pre-pandemic levels.

Key Highlights

• Over the long term, factors such as the increasing demand for natural gas and increasing investments in refineries are expected to boost the demand for the Kazakh oil and gas downstream market during the forecast period.
• However, Kazakhstan's natural gas requires better refining equipment due to the high value of hydrogen sulfide proportion, which may restrain the country's oil and gas downstream market.
• In 221, sizeable crude oil discoveries were made in southern Kazakhstan, which may result in significant reserves and offer an opportunity for new refineries that are anticipated to process the crude oil in the country.

Kazakhstan Oil & Gas Downstream Market Trends

Oil Refining Segment is Expected to Witness Significant Growth

• Kazakhstan is the largest economy in Central Asia and is home to more than 18 million people. The country is rich in coal, oil, natural gas, and uranium. It has seen significant growth in its exploration and production activities in recent years.
• In 2021, the country reached 391 thousand barrels of daily refinery throughput, which grew by 14.33% compared to 342 thousand barrels of daily refinery throughput in 2015.
• Kazakhstan's primary export oil grade is the Caspian Pipeline Consortium (CPC) blend. CPC blend is of light quality with an API of 45.3° and sweet crude (0.56% sulfur), which is of high value for its high yield of gasoline and light distillates. Most of the CPC blend is produced from the Tengiz field.
• In September 2022, the Minister of Energy, Bolat Akchulakov, announced their plans to extend the existing oil refinery in Shymkent to 9 million ton of oil per year.
• In November 2022, the government of Kazakhstan announced its plan to invest USD 2.9 billion into the development of the Ulytau region. According to the new development plan, the government is aiming to build a new oil refinery in the town of Jezkazgan between 2022 and 2026, with a capacity of 1 million ton.
• Apart from the oil refinery, the development plan also includes 16 smaller industrial projects to be implemented in the region by 2026 with a capacity of 1 million ton. Together, these projects cost around USD 1.6 billion. The country's oil refining capacity is expected to grow slightly during the forecast period due to the expansion of refineries and an increase in the demand for refined oil.
• Owing to such developments, the oil refinery segment is expected to dominate the Kazakh oil and gas downstream market during the forecast period.

Increasing Natural Gas Consumption to Drive the Market

• Kazhakstan is the 12th largest producer of natural gas. Over the past few years, the county has constantly been increasing its gas production. As of 2021, the country produced 32 billion cubic meters of natural gas.
• The penetration rate of natural gas in Kazakhstan considerably increased between 2013 and 2021. As of 2021, 55% of households across the country had access to natural gas.
• In 2021, Kazakhstan's Ministry of Energy announced USD 116.8 million for implementing 146 oil and gas projects across the country. The allocated budget is utilized for the extension of gas networks, providing access to gas for around 10,388 thousand people within the country.
• In July 2022, the QazaqGaz National Company (Joint Stock Company) started constructing a gas processing plant at the Kashagan oil field with a projected capacity of 1 billion cubic meters (bcm) of natural gas. The company plans to expand its resource base through new gas exploration and production projects.
• Hence, increasing natural gas consumption and production may result in significant growth in the market during the forecast period.

Kazakhstan Oil & Gas Downstream Market Competitor Analysis

The Kazakh oil and gas downstream market is consolidated. The major companies (in no particular order) include National Company JSC (KazMunayGas), PJSC Lukoil Oil Company, PetroKazakhstan Inc., KazTransOil JSC, and Kazakhstan Petrochemical Industries Inc. LLP.

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• The market estimate (ME) sheet in Excel format
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