Kazakhstan’s EN590 Diesel Export Landscape (2024/25)

Zoe

14 May 2025 — 35 min read

Overview: Kazakhstan’s Refined Fuel Production

Kazakhstan is a major hydrocarbon producer, pumping about 90 million tons of crude oil in 2023 (a 6.9% increase from 2022). It has three large domestic refineries – Atyrau, Pavlodar, and Shymkent – and a smaller Caspi Bitum plant in Aktau. After a series of modernization projects completed by 2018, these refineries can now produce fuels at Euro-5/EN590 standards (10 ppm sulfur diesel) suitable for international markets. Combined, the main refineries process roughly 17 million tons of crude per year, yielding about 5.2 million tons of diesel annually along with gasoline, jet fuel, and other products.

Diesel fuel (EN590) is Kazakhstan’s largest refined product output and is also the most consumed fuel domestically. Current domestic demand for diesel is around 5.5 million tons per year – slightly exceeding local production – resulting in periodic shortfalls. In fact, Kazakhstan had to import up to 850,000 tons of diesel in 2023 to meet internal needs. Thus, until new capacity comes online, virtually all EN590 diesel produced is absorbed domestically, with little left for export. High domestic consumption, subsidized fuel prices, and seasonal shortages (e.g. during harvest) have driven the government to prioritize internal supply and even restrict fuel exports to prevent shortages.

Government Policy: Kazakhstan currently maintains tight controls on refined fuel exports to ensure local supply. Since 2021, authorities have repeatedly banned or limited the export of motor fuels like gasoline and EN590 diesel. These bans – extended through 2024 – cover exports by road and rail, including to Eurasian Economic Union (EAEU) neighbors. As a result, in 2022 and 2023 Kazakhstan exported virtually no EN590 diesel or gasoline overseas. Only heavier residual oils (like mazut/fuel oil) were exported in significant volumes, as these are not in high domestic demand. Fuel oil accounted for an estimated 75% of all Kazakhstan’s oil product exports by volume in 2022. Meanwhile, lighter fuels (diesel, gasoline, jet) were largely kept on the local market; in fact, no Kazakh-origin diesel was exported in 2022 according to industry reports.

Looking ahead, Kazakhstan is investing to expand refining capacity so it can meet growing domestic needs and eventually resume exporting refined products later this decade. The Energy Ministry plans to double refining capacity to 38 million tons by 2040. Ongoing projects aim to expand Shymkent refinery to 12 mt/year by 2030 (from 6), Pavlodar to 8 mt by 2030 (from 5.5), and Atyrau to 6.7 mt by 2027. A new fourth refinery is also envisioned after 2030. Officials project that after 2030, Kazakhstan will not only fully supply its domestic fuel demand but even export petroleum products to neighboring countries. Until then, the export landscape for EN590 diesel is constrained by internal demand and policy – but the groundwork is being laid for future growth.

Export Pathways from Kazakhstan

Although current exports of EN590 diesel are minimal, Kazakhstan’s geography and infrastructure have historically allowed multiple export pathways for petroleum products and could do so again when surpluses become available. The country is landlocked, so exports rely on pipelines, railroads, and transshipment via ports in neighboring states. Key export routes for Kazakh hydrocarbons include:

Northern Route (via Russia): Kazakhstan shares a long border with Russia and is part of the EAEU customs zone, enabling relatively seamless transit. In practice, most crude oil exports flow north/west via Russia – for example through the Caspian Pipeline Consortium (CPC) line to the Black Sea, or the Atyrau-Samara pipeline into Russia’s network. For refined products, rail routes have been used. Before the current ban, Kazakh companies railed some gasoline and fuel oil to Russian Baltic Sea ports (like Ventspils, Latvia) and to Russia’s Black Sea port Taman for overseas shipment. In 2022, Taman handled ~1.25 million tons of Kazakh fuel oil/vacuum gasoil, about half of Kazakhstan’s total heavy product exports. This northern route remains critical – fuel oil exports continue by rail to Russian ports, and even crude oil has been sent via Russia’s Druzhba pipeline (for example, to a German refinery). When diesel exports resume, Russia’s port and pipeline infrastructure will likely be a major corridor.
Eastern Route (to China): Mainland China is an adjacent giant market. A Kazakhstan–China oil pipeline has operated since 2006, carrying crude oil from the Kazakh Caspian region to Xinjiang, China. Its capacity is about 20 million tons per year, and China imported 1.2 million tons of Kazakh crude through this route in 2023. However, there is no dedicated pipeline for refined fuels. Any diesel exports would likely go by rail across the border. Kazakhstan’s rail network connects to China at Dostyk/Alashankou and Altynkol/Khorgos, enabling tank car shipments into Western China. Indeed, small volumes of gasoline were sent by rail to China and Central Asian neighbors in 2022 (on the order of a few thousand tons). Regular diesel exports by rail to China have been curtailed by Kazakhstan’s ban, but the infrastructure exists. In the future, western China (e.g. Xinjiang province) could be a natural outlet for Kazakh EN590 diesel via rail, given the proximity.
Southern Route (Central Asia): Kazakhstan also borders Kyrgyzstan, Uzbekistan, and via the Caspian Sea, has access to Azerbaijan/Iran. Overland trucking of fuel to Central Asian neighbors has been common historically (often illicitly due to price gaps), prompting Astana to ban fuel exports by truck altogether. Some rail exports to Uzbekistan have occurred (65,000 tons of oil in 2023), and Kazakhstan supplies fuel to Kyrgyzstan under bilateral agreements (often duty-free). There is even evidence of informal pipeline taps and smuggling of diesel into Kyrgyzstan. Once export restrictions ease, Uzbekistan, Kyrgyzstan, and Tajikistan are likely markets for Kazakh diesel by rail or pipeline due to their deficit of refined products. Further south, Kazakhstan has begun testing a Trans-Caspian route via Azerbaijan and Georgia – in 2023 about 1 million tons of Kazakh oil was shipped across the Caspian Sea and through the Baku-Tbilisi-Ceyhan pipeline. Similarly, refined products could be ferried from Kazakhstan’s Aktau port to Baku and onward by rail to Black Sea ports (like Batumi) for export. Another nascent avenue is via Iran: Kazakhstan inked swap deals to send oil to Iran’s Caspian port (Neka) in exchange for equivalent oil delivered at the Persian Gulf. While primarily for crude, this Iran route could theoretically handle refined products swaps in the future, offering access to Persian Gulf shipping lanes.
Western Route (Caspian to Europe): As part of its diversification, Kazakhstan is turning westward by shipping more crude and products across the Caspian Sea to Azerbaijan/Georgia (the “Middle Corridor”). The volume of Kazakh oil exports from the port of Aktau for 11 months of 2023 increased by 50%. For refined products, this route saw small test shipments of gasoline to Azerbaijan in 2022. The Batumi oil terminal in Georgia (formerly KazMunayGas-owned) has been used to export Kazakh hydrocarbons. In the medium term, if Kazakhstan produces surplus EN590 diesel, it could send it west by tanker across the Caspian, then via rail or pipeline to the Black Sea, and on to European markets. Given Europe’s demand for diesel (especially after sanctions on Russian fuel), this western pathway could be strategically important once Kazakh export volumes rise.
Southeast/Global Shipping: To reach maritime markets like Singapore or Hong Kong from landlocked Kazakhstan requires piggybacking on a neighbor’s port. The primary options are Russia’s ports (discussed above) or potentially Chinese ports. For example, Kazakh oil or fuel could be railed to ports in eastern China (e.g. Lianyungang, where Kazakhstan has invested in a dry port facility) for loading onto ships bound for Asia. Alternatively, product could move by rail to Russia’s Far East ports (like Vladivostok or Nakhodka) for shipment across the Asia-Pacific. These are very long distances, but not impossible for high-value products – especially since South Korea and China already import Kazakh crude that travels similar distances. In fact, South Korea was one of the largest buyers of Kazakh crude oil in 2023 (over $3.65 B worth), which it imports via ocean tankers from Russian or other ports. The same logistics could carry diesel or jet fuel if conditions were favorable. Hong Kong and Singapore, as free ports, can source fuel from anywhere in the world, so a cargo of Kazakh diesel could in theory be shipped via the Black Sea & Suez Canal route, or via the Russian Arctic route in summer, etc. These would only be economical if Kazakhstan’s fuel is priced very competitively, due to the long transport.

In summary, Kazakhstan’s export pathways are multi-modal. Crude oil is predominantly exported by pipelines (CPC, Kazakhstan-China, and Russian Transneft system) and seaborne via Russian ports, whereas refined products historically moved by rail to ports in Russia or via the Caspian. Once export bans lift, the same corridors will handle EN590 diesel exports: rail to Russia’s ports for Europe and Asia, rail to China for Asian markets, and shorter-distance rail/truck to Central Asian neighbors. The country is actively working to expand and diversify these routes, enhancing capacity at border crossings, Caspian ports, and pursuing new pipeline links, to ensure its oil exports (crude or refined) can reach multiple markets in a reliable way.

Logistics Infrastructure and Trade Routes

Kazakhstan’s pipeline and rail infrastructure form the backbone of its oil export logistics.

Kazakhstan has built up substantial logistics infrastructure to transport oil from inland fields to foreign markets. These assets will likewise enable refined product exports. Key elements include:

Pipelines: The country’s pipeline network is dominated by crude oil lines. The Caspian Pipeline Consortium (CPC) line runs from Kazakhstan’s giant Tengiz field to Novorossiysk on Russia’s Black Sea coast. CPC carries about 1.2 million of Kazakhstan’s oil exports and has a capacity of ~72.5 million tons per year after recent debottlenecking. Another major route is the Uzen-Atyrau-Samara pipeline connecting west Kazakhstan to Russia’s pipeline system at Samara, feeding oil onwards to Europe. In the east, the Kazakhstan–China pipeline (a JV between KazMunayGas and CNPC) stretches 2,200 km from Atyrau to Alashankou on the Chinese border. It is China’s first direct import pipeline and can carry 14–20 million tons of oil per year. There are also domestic inter-field pipelines (Kenkiyak–Kumkol, etc.) linking western production to the main grid. Refined products pipelines, however, are limited – most oil product distribution inside Kazakhstan (and to neighbors) is by rail. One small exception is a pipeline supplying jet fuel to Astana airport. For exports, pipelines mainly facilitate crude oil, but if regional agreements allowed, one could envision repurposing or building spur lines for diesel to nearby markets (for instance, a proposed pipeline to northern Kyrgyzstan has been discussed in the past). Until then, rail and road remain the chief mode for moving refined fuels out of Kazakhstan.
Railroads: Kazakhstan’s state railway (KTZ) is a crucial lifeline for oil product transport. The country’s extensive rail network links refinery sites to border crossings and ports. Rail tank cars are used to ship fuel oil, gasoline, and diesel across long distances. Even at the height of exports, market participants noted that the tank car fleet for light products was mostly used domestically, while export movements focused on heavy products. In 2022, Kazakhstan rail-exported 2.49 million tons of heavy petroleum products (fuel oil and VGO). Common rail corridors for exports include: westward to Russia’s Taman port on the Black Sea (via connecting rail through Atyrau and Astrakhan), northwest to Baltic ports (via Russia), south to Uzbekistan and Tajikistan, and east to China (via Dostyk or Altynkol). The rail system gives Kazakhstan flexibility to send products in any direction – a critical feature for a landlocked exporter. However, capacity can be constrained by availability of wagons and bottlenecks at certain border crossings. Notably, Dostyk/Alashankou (Kazakh-China rail port) handles heavy two-way traffic; Kazakhstan has invested in a second China rail link at Altynkol/Khorgos to boost throughput. In recent years, Kazakhstan also started using containerized rail shipments for certain oil products to China, improving efficiency. Overall, rail is the workhorse for refined exports, complementing pipelines which handle crude.
Ports and Shipping: Though landlocked, Kazakhstan leverages Caspian Sea ports for oil transit. Aktau is the primary oil port, equipped to load crude and fuel oil onto tankers or barges. A newer port at Kuryk also facilitates tanker loading (initially built for oil, now mainly a ferry port). These ports move Kazakh oil across the Caspian Sea to Azerbaijan. From Baku, oil can go into the BTC pipeline or by rail to Georgian ports. As mentioned, Kazakhstan increased trans-Caspian exports significantly in 2023. For refined products, Caspian shipments have been smaller-scale, but feasible. On the receiving side, Kazakhstan historically owned the Batumi oil terminal on the Black Sea and has used the Russian port of Makhachkala (in Dagestan on the Caspian) as an exit for oil heading to the Black Sea by pipeline. Additionally, Russian deep-water ports are indispensable: Kazakh crude and fuel oil are loaded at Novorossiysk and Taman for ocean transport. The Black Sea-Mediterranean route is thus a main channel to reach global tankers. Less commonly, some Kazakh product could be sent to Baltic ports (like Ventspils, as noted for gasoline shipments) and then shipped onward. For Asian deliveries, cargoes would typically travel from the Black Sea through the Suez Canal to reach markets like Singapore. In theory, if using Russia’s Far East ports or a Chinese port, shipments could head directly into the Pacific. There have been small volumes of Kazakh oil tested via Russia’s Arctic route as well. Kazakhstan’s national tanker company, Kazmortransflot, operates a fleet on the Caspian and has partnered in projects to charter tankers for international routes, ensuring the country has some control over maritime logistics.
Storage and Hubs: Effective exports require storage and blending facilities. Kazakhstan has oil terminals and storage depots at key junctions – e.g., at Aktau port, at Atyrau (for feeding CPC and rail), at Pavlodar and Shymkent (where rail shipments originate). Abroad, Kazakh companies have leased storage in Georgian ports and in Finland (for crude) to stage shipments. In China’s Xinjiang, CNPC’s Alashankou terminal can store and handle incoming crude from Kazakhstan; a similar concept for diesel would need tankage on both sides of the border. Hong Kong and Singapore, being trading hubs, have extensive independent storage where products from Kazakhstan could be blended or stored by traders upon arrival. For instance, a trader could bring Kazakh EN590 diesel to a bonded tank in Singapore for resale into Southeast Asia’s market. Having the logistics chain – from pipeline/rail loading facilities at refineries, to terminals, tanks, and ports – is vital for any new export stream. Kazakhstan has built much of this physical infrastructure during the oil boom of the 2000s–2010s, meaning the hardware is largely in place to support refined product exports when policy allows.

In summary, Kazakhstan’s logistical network for petroleum exports is robust: a mix of pipeline arteries for crude, railway corridors for flexibility, and access to ports via partnerships. This network has been tested and used for crude and heavy product exports, and could be readily utilized for EN590 diesel and other light products in the future. The main missing piece is simply availability of exportable surplus and the lifting of policy restrictions, rather than any major infrastructural gap.

Key Players in Kazakhstan’s Oil Export Value Chain

The business of exporting EN590 diesel and other petroleum products from Kazakhstan involves a wide array of companies at each stage – from oil production and refining (upstream and refining sector), through transportation (midstream logistics), to trading and distribution (downstream market). Below is a mapping of the key companies and entities currently involved:

Upstream Producers (Crude Oil & Feedstock): These are the companies that extract oil (and gas) in Kazakhstan, providing the feedstock for refineries. Major players include:

KazMunayGas (KMG): The national oil & gas company of Kazakhstan. KMG has stakes in all major oil projects and fully owns some mid-sized fields. It operates Uzen, Mangistau, and other fields and is a partner in Tengiz, Kashagan, and Karachaganak. KMG also owns the Atyrau and Pavlodar refineries, and half of the Shymkent refinery, making it integral from production through refining. Any export of products typically involves KMG or its subsidiaries (like KMG Trading).
Tengizchevroil (TCO): A joint venture led by Chevron with partners ExxonMobil , KMG and LukArco . TCO operates the giant Tengiz field, producing ~30% of Kazakhstan’s total crude. After a $48bn expansion, Tengiz output is nearing 40 million tons/year (up to 900,000 barrels per day). TCO’s crude is the main source for CPC pipeline exports. While TCO itself doesn’t export refined products (it exports crude oil and LPG), its production volumes underpin Kazakhstan’s export capacity and can influence government decisions on refining throughput (e.g. sending more crude to domestic refineries or export).
North Caspian Operating Company (NCOC): The consortium operating the Kashagan offshore oil field. Partners include KMG, Eni, TotalEnergies, Shell, ExxonMobil, China’s CNPC, and Japan’s Inpex. Kashagan produces high-sulfur crude (when fully online ~13 mt/year potential) which partly feeds Atyrau refinery (after sweetening) and is exported via CPC. Kashagan’s output could in the future supply a new refinery or be swapped for refined products.
Karachaganak Petroleum Operating (KPO): A group led by Shell and ENI, with Chevron, Lukoil, and KMG as partners. Karachaganak is a gas-condensate field producing liquids (about 10-11 mt/year). Most Karachaganak condensate is processed at Orenburg refinery in Russia under a swap, but some could be refined domestically.
CNPC and Other Producers: CNPC (China National Petroleum Corp) operates AktobeMunaiGas and PetroKazakhstan ventures, producing crude in Aktobe and Kyzylorda regions. PetroKazakhstan (CNPC, KMG ) also runs the Shymkent refinery, so it is a vertically integrated player for southern Kazakhstan – any diesel exported from Shymkent would involve PetroKazakhstan’s supply. Other notable producers: CITIC Group (owns Karazhanbas field with KMG), OMV Petrom (smaller fields), and independent firms like JV “Condensate” which runs a mini-refinery. These smaller players occasionally seek to export products (e.g. the Condensate refinery was granted a quota to export a small batch of gasoline in 2024).

In summary, upstream is dominated by KMG and international majors. They produce the oil that becomes EN590 diesel. While upstream companies might not directly export diesel, their cooperation is crucial – e.g. a new exporter might need to source crude or buy diesel from these producers or their affiliate refineries.

Refining & Midstream (Processing and Transport): Once crude is produced, it’s refined and transported. Key entities:

Refineries (KazMunayGas & CNPC): As noted, KMG subsidiaries own Atyrau and Pavlodar refineries and co-own Shymkent (with CNPC). These three are the only plants producing EN590 diesel at scale. Thus, KMG and CNPC effectively control the supply of exportable diesel. Any new export business would involve purchasing from these refineries or tolling crude through them. Refinery output is subject to state allocations (to domestic market first). Rompetrol Rominvest (owned by KMG’s international arm) operates two refineries in Romania, but those process mostly Kazakh crude in Europe – a separate downstream arm that KMG could use to market products abroad.
KazTransOil (KTO): A subsidiary of KMG that owns and operates the oil pipeline network in Kazakhstan (except CPC and the China pipeline). KTO pipelines gather crude from fields to refineries and export routes. While KTO mainly handles crude, it is a key midstream player; for example, KTO manages pipeline shipments that indirectly allow swaps (like sending crude to Russia in exchange for refined products).
Caspian Pipeline Consortium (CPC): An international pipeline company (shareholders: Russia’s Transneft, KMG, Chevron, Exxon, etc.) that transports Kazakh crude to the Black Sea. CPC doesn’t carry refined products, but CPC’s throughput affects how much crude is available for domestic refining. Its relevance to diesel exports is that if CPC is at capacity or disrupted, Kazakhstan might divert more crude to domestic refineries (or vice versa). CPC’s smooth operation thus underpins Kazakhstan’s flexibility in feeding refineries vs. exporting crude.
Kazakhstan-China Pipeline (KCP): A joint venture of CNPC and KMG operating the Atasu-Alashankou crude pipeline. KCP is vital for crude exports to China. While it doesn’t carry diesel, CNPC’s involvement means any refined product trade with China would likely involve CNPC’s trading arm. KCP’s pipeline could also theoretically swap volumes – e.g. Kazakhstan could send China crude via pipeline and receive equivalent diesel by rail in exchange (a possibility if both governments agree).
Kazakhstan Temir Zholy (KTZ) and Rail Operators: KTZ is the national railway company. Its freight division and private operators provide tank car fleets that move oil products. Companies like Petroleum LLP or GALO in Kazakhstan specialize in oil freight forwarding. Efficient rail logistics (scheduling, border coordination, availability of wagons) is often handled by such intermediaries. For exports, coordinating with Russian Railways (RZD) and Chinese Rail is necessary. New players might partner with established forwarders who know the ins-and-outs of securing rail routes for fuel exports.
Port & Shipping Companies: On the Caspian, Kazmortransflot (KMTF), a KMG subsidiary, runs tankers that carry oil from Aktau to Baku. KMTF or its partners could similarly carry diesel or fuel oil across the sea. At Russian ports, Transneft Service and private terminal operators like Oteko (at Taman) handle Kazakh shipments. Large commodity traders also lease storage and terminal capacity (for example, Vitol has been involved in handling CPC blend exports). In shipping, global tanker operators (Maersk Tankers, SCF, etc.) are contracted to lift Kazakh oil from Black Sea ports – those same channels would be used for product tankers. For instance, diesel exports from Taman might be loaded onto MR-class product tankers arranged by trading firms. In sum, a network of midstream companies – pipeline JVs, railway firms, port operators – collectively ensure that oil can physically move from Kazakhstan to end markets.

Traders, Exporters & Importers (Downstream Market): Finally, the companies that buy, sell, and deliver Kazakh petroleum to end-users:

Global Trading Houses: Firms like Vitol, Glencore, Trafigura, Mercuria, and Gunvor have historically been very active in Kazakhstan’s oil sector. They purchase crude for export (Vitol has a longstanding relationship marketing a portion of Tengiz output and KMG’s share from CPC). These traders also supply Kazakhstan with needed imports (like Russian fuel in deficit times). It is likely these same traders would handle EN590 diesel exports when allowed – they have the marketing networks in China, Singapore, Europe to place volumes. For example, Vitol’s Asian arm could take Kazakh diesel and deliver to Hong Kong or Vietnam; Trafigura could move volumes to Africa or Singapore, etc. Traders often provide pre-financing to Kazakh entities (cash upfront for future delivery), a model that could help a new exporter secure product. KMG has its own trading arm (based in Switzerland, formerly part of Rompetrol) which also trades crude and products in international markets, often in partnership with these global houses.
Domestic Exporters: Apart from KMG Trading, there are local licensed exporters (when policy allows). Historically, PetroKazakhstan (CNPC) could export products from Shymkent if given quota. Smaller refineries like Condensate JSC have tried exporting niche products (e.g. small gasoline cargo). Also, some Kazakh independent traders or financial intermediaries register in free zones (like Astana International Financial Centre) aiming to trade oil products. However, given state controls, most exportable volumes are funneled through state-approved channels (often via KMG or in swap deals). Thus, any new entrant would likely need to partner with one of these established exporters or obtain government sanction to lift fuel.
Importers and End-buyers in Target Markets: On the Mainland China side, the primary importers of crude from Kazakhstan are PetroChina (CNPC) and Sinopec, via long-term agreements. For refined products, Chinese state-owned fuel distributors or trading arms would be the likely buyers. For instance, Chinaoil (PetroChina International) or Sinochem might import diesel if there were quotas for it, especially to supply Xinjiang or as blending stock. In Hong Kong, the market is served by a few key fuel distributors: names include Shell Hong Kong, ExxonMobil (ESSO) HK, Chevron (Caltex) HK, and PetroChina’s subsidiary which all import diesel and gasoline for local sale. These companies could buy EN590 diesel on tenders or spot cargoes – e.g. PetroChina might source from its Kazakh affiliates, or Shell could buy via its trading desk in Singapore. Singapore is a trading hub rather than an end-consumer, so importers there are typically the trading companies and oil majors who operate storage. Vitol Asia, BP Singapore, Shell Trading, Petrobras Singapore, Mitsui, etc. all participate in the diesel market. They might purchase Kazakh-origin diesel if price and quality meet their needs, to blend into the marine fuels pool or to re-export within Asia. South Korea’s refiners (SK Energy, GS Caltex, S-Oil, Hyundai Oilbank) generally don’t need to import diesel (being net exporters), but they do import crude from Kazakhstan and occasionally specialty feedstocks. A South Korean trader like GS Global or Posco International might handle a deal for Kazakh diesel if there was a specific demand (for example, for military use or to resell to a deficit country). Additionally, regional trading hubs like Fujairah (UAE) or European traders might show interest in Kazakh diesel, especially as Europe has banned Russian diesel – traders could position Kazakh barrels as non-sanctioned alternatives for Europe or Africa, provided logistics can be managed.
Facilitators and Financiers: Finally, one must note the role of banks and financing arms. International banks (ING, Societe Generale, Kazakh banks like Halyk, etc.) finance letters of credit for oil exports. Export credit agencies and organizations like the Asian Development Bank have supported infrastructure and could indirectly support new companies entering this trade by mitigating risk. Advisory firms and agents also connect Kazakh suppliers with overseas buyers, given the relationship-driven nature of this business in Central Asia.

Overall, the key players map spans from multinational oil giants and Kazakhstan’s national companies at the source, through joint pipeline ventures and state transport firms in the middle, to Swiss trading houses and Asian oil majors on the receiving end. Any new entrant company looking to engage in Kazakh EN590 diesel exports would likely find itself interacting with many of these actors – for example, buying from a KMG refinery, using KTZ rail and Russian port operators, and selling to a Hong Kong oil distributor or a Singapore trader. Establishing the right partnerships across this chain is often critical to success.

Market Profiles: Target Destinations for Kazakh Petroleum Exports

Each potential export destination – Mainland China, Hong Kong, Singapore, South Korea, and others – has its own market characteristics, regulations, and opportunities. Below is a country-by-country (or region) assessment:

Mainland China

Market Overview: China is one of the world’s largest oil consumers and a key partner to Kazakhstan. It’s already a top buyer of Kazakh crude oil, importing roughly 4–5 million tons of crude annually in recent years. However, China’s domestic refining capacity is massive and often runs surplus in diesel. In fact, China has in recent years been a net exporter of diesel, and it tightly controls import/export quotas for refined fuels. This means China does not typically import significant volumes of diesel under normal conditions. Instead, Chinese state refiners produce EN590-standard diesel in excess and even export it (especially when export quotas are eased, as seen in 2022–2023 when China raised fuel exports to support global supply).

Market Advantages: For Kazakhstan, proximity is a big plus. Western China (Xinjiang) is relatively remote from China’s coastal refineries, so Kazakh refineries in Central Asia are actually closer suppliers to that region. If Xinjiang’s demand grows or if China encourages frontier trade, Kazakh diesel could find a niche. Additionally, China’s involvement in Kazakhstan’s oil sector (through CNPC) provides an existing commercial bridge. Chinese companies have stakes in Kazakh production and refining, which could ease negotiation of off-take deals. Politically, integration via the Belt and Road Initiative has led to supportive infrastructure and trade ties – the Atasu-Alashankou pipeline, cross-border rail, and a currency swap arrangement for trade, all make transacting a bit smoother. Another advantage is that China’s western regions use a lot of diesel for trucking, mining, and industry; local output there is limited, so bringing fuel from Kazakhstan by rail or tanker trucks (if allowed) can be viable.

Regulatory & Operational Considerations: The primary hurdle is China’s import quota system for refined products. The Chinese government issues quotas to certain trading firms to import diesel, but these are usually small and mainly for specialty fuels, since domestic supply is ample. High tariffs or VAT could apply without quotas. An operational issue is that China’s customs would need clear specification (ensuring Kazakh diesel meets China’s quality standards – which it should, as EN590 is equivalent to China’s Euro V). Logistics are straightforward: rail to Urumqi or Alashankou, then distributed by Sinopec/CNPC marketing networks. Language and cultural business practice differences require a local presence or partner – fortunately CNPC’s subsidiary in Kazakhstan (PetroChina Kazakhstan) could play facilitator. The prices in China are regulated (diesel retail prices are capped by the state), which might affect the attractiveness of imported fuel unless there’s a shortage. However, free trade zones or bonded storage in Kashgar or elsewhere could allow Kazakh fuel to be stored duty-free for re-export or for seasonal demand.

Outlook: In the near term, China is not relying on imported diesel – it even reduced imports from Russia after building its own capacity. But strategically, China likes supply diversification. If Kazakhstan offers diesel at competitive rates (perhaps via a government-to-government deal swapping crude for products), China might take it especially for its inland provinces. Also, emergency situations (like a refinery outage in Western China) could suddenly make Kazakh diesel crucial. From 2025 onward, if Kazakhstan lifts its bans and has excess, a logical first buyer is China due to the existing oil ties and shared border. Long-term advantage: China’s growth in petrochemical demand means it might free up less diesel for export (consuming more internally), opening room for imports into regions like Xinjiang or for the People’s Liberation Army’s logistical fuel needs, where secure supply from a friendly neighbor is valued.

Hong Kong

Market Overview: Hong Kong is a major trading port and financial center, but has no domestic oil production or refining. It imports all petroleum products to meet its energy needs. Diesel in Hong Kong is used for transport (diesel trucks, buses), industry, and backup power generation. Hong Kong typically imports EN590 ultra-low sulfur diesel, as it mandates Euro V emission standards for vehicles. The market volume is modest – Hong Kong’s diesel consumption is only a few tens of thousands of barrels per day. The key feature is that Hong Kong is a free port with no tariffs on oil product imports, making it an attractive trading hub.

Market Advantages: Hong Kong’s open trading regime means any supplier can compete on equal footing (no import duties or quotas). The city’s sophisticated port and storage facilities can handle tanker shipments of diesel efficiently. For Kazakhstan, Hong Kong could serve as a gateway to China – since fuel entering Hong Kong is not subject to mainland quotas, some traders use Hong Kong as a middle step (though legally re-export from HK to China still needs mainland approval, it can sometimes act as a conduit under different customs codes). Also, Hong Kong’s financial infrastructure – banks, letters of credit – is top-notch, which helps in arranging trade deals and financing. The presence of many international trading firms’ offices in Hong Kong means Kazakh sellers can find buyers or partners locally. There are also established Hong Kong oil importers: for example, Sinopec (Hong Kong) Ltd and PetroChina International are active, as are the big four oil majors (Shell, Exxon/Esso, Chevron/Caltex, BP has presence via distributors). These companies might be very interested in diversifying supply, especially if it offers cost advantages or security of supply.

Regulatory & Operational Traits: Hong Kong maintains a list of licensed fuel importers (only a set number of firms can directly import motor fuels). These include the major oil companies mentioned. A new entrant from Kazakhstan would likely need to partner with or sell to one of these license holders to enter the HK market. Quality-wise, Hong Kong requires ultra-low sulfur diesel (ULSD); Kazakh EN590 meets this (10 ppm S is ULSD). Hong Kong also has strict environmental laws – any supplier would have to ensure no off-spec product or face penalties. Operationally, Hong Kong typically imports products from regional refineries (e.g. from Singapore, South Korea, Taiwan or mainland China). In 2023, about 1.3 gigaliters (≈1.1 million tons) of diesel came from Mainland China to Hong Kong, showing China is a main source. This implies that to break in, Kazakh diesel must be price-competitive against Chinese supplies (which benefit from proximity). Freight from Black Sea to HK adds cost, but it could be offset if Kazakh export prices are lower than others (perhaps due to lower feedstock cost or government support). Hong Kong’s market is also oriented to flexible, spot purchasing – it doesn’t typically do long-term contracts for diesel; instead, traders deliver cargoes based on arbitrage. So a Kazakh exporter might target Hong Kong opportunistically when prices in Asia are higher than Europe, for instance.

Opportunity: Hong Kong can serve as a re-export hub. A Kazakh company could deliver a cargo to Hong Kong, sell part of it into local consumption and then store or re-blend the rest for sale to other Asia-Pacific markets. The free port status means minimal paperwork and quick turnaround. Also, dealing in US dollars (common in HK) suits Kazakhstan, as its oil exports are dollar-denominated. Another angle: Hong Kong’s strategic storage – companies sometimes stockpile diesel in HK if they anticipate supply crunches in China or region. A new entrant could supply into such storage for a fee or profit-sharing. Financial and legal transparency in Hong Kong is high, which reduces counterparty risk. All in all, while Hong Kong’s own demand is not huge, it is an easy entry point into East Asia and could be an important part of a Kazakhstan-to-Asia supply chain, especially for trading firms handling Kazakh diesel.

Singapore

Market Overview: Singapore is often dubbed the “Houston of Asia” or the world’s oil trading hub. It is one of the largest refining centers globally (about 1.5 million barrels/day refining capacity across ExxonMobil, Shell, and Petronas-operated plants). It’s also the pricing center for Asian oil products, with benchmarks like Singapore Gasoil (10ppm) used as reference prices. Singapore imports crude and also imports/exports refined products extensively for trading and blending. It has massive storage capacity (in Jurong Island, Tankstore, Vopak terminals, etc.) and is a top supplier of bunker fuel for ships. For diesel/EN590, Singapore both produces it and imports if arbitrage is favorable, then re-exports to regional consumers (Malaysia, Indonesia, Australia, etc.). Essentially, Singapore is not an end-consumer market but a redistribution hub for petroleum.

Market Advantages: For a Kazakh exporter, Singapore offers depth of market and liquidity. One can sell a cargo of diesel in Singapore any day – there are always buyers (majors, traders, state entities). Prices are competitive and transparent (linked to Platts assessments). Singapore’s zero import tax, free trade status for oil and well-developed legal framework make it straightforward to do business. It’s also a convenient place to blend or upgrade products – for instance, if Kazakh diesel has slightly higher sulfur or a different cold property, it can be blended with other stocks in Singapore’s storage to meet various specs for different countries. Moreover, Singapore’s role as a financing and trade services center means letters of credit and insurance for cargos are easy to obtain with local banks.

Regulatory/Operational Traits: Singapore imposes virtually no restrictions on oil imports/exports; it’s all market-driven. The only regulations are quality (for fuels sold domestically or as bunker – e.g. bunker fuel must meet IMO specs, diesel for vehicles meets Euro V). As long as an exporter meets contract specs, Singapore customs is fine. Operationally, a tanker from the Black Sea (if coming through Suez) or from a Russian Pacific port can discharge in Singapore. Parcel sizes might matter – a typical diesel cargo to Singapore might be 30,000 tons on an LR1 or 40-50k on an LR2 tanker. Kazakhstan’s volumes might at first be smaller, so coordinating a larger shipment or combining with other products could be needed. Here’s where traders play a role: a trader might aggregate Kazakh diesel with some Russian or Middle Eastern diesel to make a full cargo to Singapore. It’s noteworthy that since early 2023, Russian diesel is sanctioned in Europe but not in Asia, and a lot of it flows to Singapore/Asia. Kazakh diesel would be seen as non-sanctioned and could perhaps command a slight premium or at least avoid any reputational issues, which is a selling point in the current geopolitics.

Market Niche: Singapore also might use Kazakh diesel in its role to supply countries like Indonesia or Bangladesh, which sometimes tender for diesel. A trader in Singapore could buy Kazakh diesel and then tender it to those countries. Another niche is marine gasoil (MGO) – ships visiting Singapore need EN590-quality diesel for use in emission control areas or for certain engines. If Kazakh EN590 is priced right, bunker suppliers in Singapore could purchase it for blending into marine fuels. With Kazakhstan’s refineries upgrading, their diesel is on-spec for such uses.

Competition: Singapore’s diesel pool is competitive; it gets supply from India’s giant refineries, from the Middle East, from Northeast Asia (Korea/Japan occasionally), and lately from China. Kazakhstan entering this mix will depend on freight economics and timing. The freight cost from Black Sea to Singapore can be significant (in 2024, freight for a Handymax tanker could be millions of dollars). This could be offset if Kazakhstan sells diesel at lower ex-refinery prices (perhaps because their crude is cheaper internally). If Kazakhstan were to subsidize or support exports, that could make their diesel very attractive in Singapore.

Bottom Line: Singapore is an almost necessary market for any new petroleum exporter in Asia due to its scale and connectivity. For Kazakhstan, establishing a presence in Singapore (perhaps via a partnership or a trading office) would be wise to tap into global trading flows. Success in Singapore would mean Kazakhstan’s EN590 diesel is being accepted as part of the supply pool and finding end-users across Asia-Pacific. The country’s leadership is likely aware of this, as KMG’s trading arm has a presence in Singapore and KazMunayGas has historically sold crude to Singapore-based traders who then move it onward. The key will be making the economics work and building a reputation for reliable delivery.

South Korea

Market Overview: South Korea is home to some of the world’s largest, most sophisticated refineries (owned by SK Energy, GS Caltex, S-Oil, and Hyundai Oilbank). These refineries not only meet domestic demand but also export large volumes of refined fuels — South Korea has been a net exporter of diesel and gasoline for years. Major export destinations for Korean diesel include Southeast Asia and Oceania. The country itself consumes a lot of diesel (for transport and industry), but its refiners typically oversupply it. South Korea imports crude oil from Kazakhstan (about $3.65 billion worth in 2023, making it a top-3 destination for Kazakh crude). However, it imports very little refined product because domestic production is ample.

Market Advantages: Why consider South Korea then? For one, South Korea’s petrochemical sector sometimes needs specific feedstocks (e.g. low-sulfur vacuum gasoil or straight-run fuel oil) which Kazakhstan could provide. If we broaden “other petroleum products,” Kazakh VGO or naphtha could interest Korean buyers for further refining. For EN590 diesel specifically, Korea might not import for local use, but Korean trading firms could act as intermediaries to resell Kazakh products elsewhere. South Korea’s proximity to Kazakhstan (via the Eurasian landmass or via sea through Russia’s Far East) is an advantage only in theory; practically most Kazakh exports to Korea still go via long tanker routes around Eurasia. Another plus: South Korea has free trade agreements (FTAs) with many countries (EU, US, etc.), and while Kazakhstan is not one, Korea’s import tariffs on petrochemicals are low (and within the EAEU framework, if any trade agreement emerges it could facilitate things). South Korea also has a very stable regulatory environment and strong rule of law, reducing counterparty risk. And importantly, Korean companies are investors in Kazakhstan – for instance, KNOC (Korea National Oil Corp) had stakes in some Kazakh blocks, and Korean firms are involved in Kazakhstan’s petrochemical projects. This goodwill could translate into opportunities for Kazakh exports to be taken up by Korean firms, if not for Korea itself then for their global trading portfolio.

Regulatory & Operational Traits: South Korea doesn’t prohibit fuel imports, but given the dominance of domestic refiners, one cannot easily sell into the Korean market without going through them or finding a niche. Fuel standards in Korea align with Euro V/VI, so Kazakh diesel meets specs. If a third party (say a trading firm) wanted to import Kazakh diesel into Korea, they might face a small tariff and the challenge that local refiners would likely undercut on price to keep their market share. However, there could be situations (e.g. a refinery maintenance shutdown in Korea or a spike in demand) where spot imports happen. Korea’s state oil company KNOC also maintains strategic reserves and occasionally does oil product swaps; a savvy entrant might swap Kazakh diesel for crude or other products with KNOC. On the logistics side, delivering to Korea would typically mean ocean freight from a port like Novorossiysk or via transshipment. There is an outside chance for a rail land bridge: theoretically, one could rail tank containers through Russia and Manchuria into Korea via China or Russia’s Far East, but this is not currently common for liquids (containerized liquids maybe, but complicated).

Market Insights: In essence, South Korea is more of a competitor than a customer when it comes to diesel. Its refiners produce so much that they are looking to sell, not buy. For Kazakhstan, engaging with Korea might mean inviting Korean investment in Kazakh refining (to increase output) or securing Korean technical expertise, rather than finding a big customer for diesel. Nevertheless, South Korea’s import of Kazakh crude is a critical linkage – a large portion of Kazakh oil ends up being refined in Korea, then the diesel from it is sold to other countries (like Australia or Philippines). So one could say Kazakhstan already indirectly supplies those markets via Korea. If Kazakhstan wanted to capture more value, it might aim to export refined diesel directly, bypassing Korean refiners. To do so, it would need to compete on price and reliability with Korean exports.

Future prospects: A scenario to watch is the decarbonization push. South Korea has carbon neutrality goals that could reduce diesel demand domestically long-term, possibly leading refiners to export even more or cut runs. If they cut runs, Korea might at times need imported diesel for peak demands. Additionally, South Korea’s geopolitical strategy to secure diverse oil sources might make it supportive of Kazakhstan’s emergence as a supplier. As a highly developed market, Korea would demand absolute consistency in quality and delivery – a high bar that could nevertheless push Kazakhstan to improve standards further. For a new Kazakh trading entrant, partnering with a Korean conglomerate (like Samsung C&T, Hyundai Corp, etc., which have trading arms) could open doors both in Korea and globally.

Other Relevant Markets

Beyond the four specifically listed regions, there are other countries and markets tied into the Kazakhstan petroleum trade:

Central Asia (Uzbekistan, Kyrgyzstan, Tajikistan): These neighboring countries traditionally rely on Kazakhstan (and Russia) for fuel supplies. Uzbekistan has some refining capacity but not always enough diesel; it imported Kazakh fuel by rail in the past and even received 65 thousand tons of Kazakh oil by rail in 2023 for its refineries. Kyrgyzstan depends heavily on Kazakh and Russian fuel . These are natural export markets once Kazakhstan has surplus, due to geographic proximity and existing distribution channels. Kazakhstan might restart fuel exports to these neighbors earlier than to overseas markets, as it has done in limited volumes under special quotas or as “humanitarian aid” in winter. The advantage here is simplified logistics (short rail or truck routes) and aligned standards via the EAEU. However, low purchasing power and a need for low prices can limit profitability. Regulatory: within the EAEU, exports to Kyrgyzstan (a member) normally wouldn’t face customs duties, but Kazakhstan’s internal bans have overridden that. When lifted, we can expect a resumption of legal flows.
Europe (EU countries): Historically, Europe hasn’t imported much Kazakh refined product – it got Kazakh crude and plenty of Russian diesel. But with the EU banning Russian diesel (as of Feb 2023), there is potentially a void in the European diesel market that alternative suppliers are filling (Middle East, India, US). If Kazakhstan can free up EN590 diesel, European traders would be interested. The EU specification is EN590, exactly what Kazakh refineries produce, so quality matches. Already, in 2022, small batches of Kazakh gasoline went to the Baltic states (Latvia, Estonia) and possibly to Eastern Europe. And notably, Kazakhstan delivered 1 million tons of crude to Germany’s Schwedt refinery in 2023 via the Druzhba pipeline to help replace Russian supply. This shows Kazakhstan’s willingness to help Europe’s fuel situation. The challenge is routing: to send diesel to the EU without Russia, the logical way is the Caspian-Azerbaijan-Georgia-Black Sea-Europe route, which is more complex and costly than simply using Russian ports. Alternatively, Kazakhstan might sell diesel to Turkey (a big diesel importer) or to Mediterranean markets through swaps. One interesting possibility: use the Druzhba pipeline in reverse for refined products. Poland and Germany have talked about importing non-Russian diesel via pipeline – if political will exists, Kazakh diesel could theoretically enter the Russian pipeline system and exit in Europe under a special arrangement (this would require high-level deals and likely small volumes initially). European market advantage for Kazakhstan is the strong demand and high prices for diesel, which could make it lucrative despite logistics. The EU also might politically welcome Kazakh fuel as it aims to diversify from Russia.
Middle East and South Asia: These regions might not be first-order targets, but they are large consumers. For instance, Pakistan and Afghanistan are fuel-deficit and import diesel (often from Central Asia or Russia via traders). There have been instances where Kazakh fuel was trucked to Afghanistan or swapped via Uzbekistan. As Kazakhstan’s output grows, it could send some diesel south via rail through Uzbekistan/Turkmenistan into Afghanistan or via swaps through Iran to Pakistan. The Middle East (e.g. Iraq) sometimes tenders for gasoline or diesel – a trader could source Kazakh product for that. However, competition with Gulf refiners is tough in those markets.
Russia: It might sound counterintuitive to export to Russia (which is a refining powerhouse), but specific regional dynamics exist. Kazakhstan swaps a lot of oil with Russia and historically even imported some Russian diesel to cover shortages. But there may be cases where, say, northern Russian regions adjacent to Kazakhstan find it handy to buy Kazakh fuel (especially if price-capped Kazakh domestic prices are lower). Also, as part of EAEU, if Kazakhstan has surplus, Russia legally cannot stop imports (though Russia itself banned exporting diesel in 2023 temporarily to stabilize its market, which had ripple effects). So one could see Kazakh fuel going into, for example, Siberian markets if Russian logistics favor sending their own fuel west. This is a minor possibility but worth noting as part of the integrated Eurasian market.
Africa and Other Asia: If traded via hubs like Singapore or Fujairah, Kazakh diesel could end up in Africa (for instance, West African countries often buy diesel from whoever offers the best price; a cargo could go from Black Sea to West Africa under a trader’s operation). Likewise, Bangladesh or Sri Lanka might one day receive Kazakh fuel via a Singapore trader. These aren’t direct country-to-country deals but rather outcomes of the global trading system redistributing Kazakh exports.

In essence, Kazakhstan’s fuel can ultimately reach any market given the fungible nature of oil products. But the most relevant countries involved in the business today are those mentioned above – either as consumers, transit points, or trade hubs closely tied to Kazakh oil flows.

Opportunities and Entry Pathways for New Entrants

With the backdrop of Kazakhstan poised to increase refined output and diversify exports by 2030, there are emerging opportunities for new companies – whether Kazakh or foreign – to enter the Kazakhstan-to-Asia/global petroleum export business. However, success will depend on navigating a complex mix of regulatory, financial, and logistical factors:

1. Regulatory Navigation: Any new exporter must work within Kazakhstan’s regulatory framework. As of 2024, the chief hurdle is the export ban on light fuels. A new company would need to secure an exemption or wait for policy changes. One pathway is to focus on products not under ban – e.g., fuel oil, VGO, lubes, which have been allowed. Establishing a track record exporting those could position a company for diesel exports later. Engaging with the Ministry of Energy and demonstrating a commitment to supply the domestic market could help in obtaining export quotas when they become available. Additionally, understanding EAEU regulations is key: the planned unified fuel market (now delayed to 2027) could eventually remove internal export barriers, but also expose Kazakh fuel to regional competition. New entrants should keep an eye on these integration efforts, as they could dramatically change the rules (for example, a unified market might liberalize exports but enforce price harmonization). Licensing is another aspect – companies need an oil export license in Kazakhstan (usually granted to those with production or those buying from refineries with sign-off). Partnering with a licensed entity (like KMG’s marketing arm or a refinery) can be a shortcut.

On the import side, each target country has its regulations (as discussed: China’s quotas, HK’s licensing, etc.). A savvy strategy is to use intermediary hubs – e.g., route through a free port like Singapore or a trader in Switzerland – to simplify the regulatory exposure in the buyer country. This way the new entrant deals primarily with Kazakh and international law, leaving local distribution to partners.

2. Securing Supply and Partnerships: As outlined, KMG and its refineries control the molecules. A newcomer will likely need to either buy from KMG (or CNPC) or toll crude through a refinery. One opportunity is if KMG is privatizing stakes in refineries (which was proposed in 2023 for Atyrau and Pavlodar). A foreign downstream company could invest, gaining a say in output and offtake rights. Short of ownership, long-term supply contracts can be made. For example, a trader could pre-finance the refinery expansion in exchange for an X-year agreement to lift a certain volume of diesel each month. Such deals require capital and trust, but Kazakhstan has done pre-export financing deals on the crude side (e.g. with Trafigura and Vitol) – similar models could apply for refined products.

Partnerships with infrastructure operators can also smooth entry. A deal with KTZ Rail for guaranteed tank cars, or with a port operator for guaranteed loading slots, would give a new exporter reliability advantages. Even partnering with a Russian or Azerbaijani railway company to secure transit quotas could be crucial. On the flip side, partnering with an established trader can help with market access; a new Kazakh exporter might team up with, say, Vitol where the newco handles procurement in KZ and Vitol handles shipping and sales – splitting margins.

3. Financial and Risk Considerations: Entering the oil trading arena requires strong financial backing. Companies will need to finance cargoes that are moving over long distances with long lead times (for instance, 40 days voyage plus pipeline/rail time). That implies large working capital or credit lines. One opportunity is to utilize Kazakhstan’s development institutions and Chinese financing under BRI. China’s policy banks might finance a venture that ensures fuel supply for Xinjiang. Similarly, the Eurasian Development Bank or Kazakh state banks might provide favorable loans to companies that help monetize Kazakh refined products. New entrants should also hedge against price volatility – using futures or swaps in Singapore for gasoil can lock in margins and make the business less risky. Insurance is vital: transiting Russia or the Black Sea has some political risk (as seen with occasional CPC disruptions or Black Sea security issues). Obtaining insurance or guarantees, possibly via agencies like MIGA or Euler Hermes if foreign, can de-risk things.

4. Logistical Execution: Building a robust supply chain is make-or-break. A new exporter must arrange feedstock supply - refining -transport - delivery efficiently. They should invest early in logistics assets: e.g., leasing tank cars, booking pipeline capacity if available (CPC expansion slots, etc.), and perhaps even leasing storage tanks at ports. Owning or long-leasing a storage in say, Batumi or Xinjiang, could give flexibility to time the market. If targeting marine exports, one might consider time-chartering a tanker on a long-term basis to guarantee availability (or conversely, use FOB sales to pass shipping to buyers, but that may reduce margin). The seasonality should be managed too – Kazakhstan’s winters can slow rail transport (freezing issues for diesel in unheated cars, etc., though EN590 has winter grades). Planning seasonal product specifications and routes (maybe pushing more exports in summer when domestic demand is lower) will maximize success.

5. Compliance and Transparency: In the post-2022 geopolitical climate, any business involving ex-Soviet oil flows requires careful compliance. A new exporter must ensure Kazakh origin of their product is well-documented to avoid any association with sanctioned Russian product. Kazakhstan has already started certifying “Kazakh Origin” oil for CPC to distinguish it. A similar system might be needed for refined exports – providing papers to buyers that this diesel was produced and refined in Kazakhstan (especially if transiting Russia, to avoid it being mistaken for Russian origin under sanctions). Compliance with environmental and quality standards will also build credibility. Adopting ESG practices (like tracking carbon intensity of the fuel, given Kazakhstan’s power mix includes coal) could even become a differentiator in “green” fuel procurement down the line.

6. Government Support and Strategy: The Kazakh government is keen to boost non-crude exports and has signaled support for post-2030 product exportspgca.kz. A new entrant should align with this strategy, possibly branding their initiative as helping Kazakhstan move up the value chain. They could seek support such as export duty waivers (if duties are imposed later), or inclusion in national export promotion programs. For example, being part of “Kazakh Oil Products” export consortium might help in negotiations with transit countries. On the Chinese side, leveraging Kazakhstan’s role in Belt and Road could grant favorable terms – e.g. reduced rail tariffs on China’s side for Kazakh fuel, if positioned as strengthening China’s energy security via BRI.

In summary, while challenges exist, pathways for new companies might look like this:

In the short term (2024–2025): focus on peripheral products (fuel oil, etc.) and building relationships; possibly supply neighboring countries under small quotas (testing the waters, proving capability). Set up the trading arm, hire experts in railway logistics and oil trading, establish credit lines.
In the medium term (2026–2030): as refinery expansions complete, secure offtake agreements for the incremental volumes. Work with Kazakh authorities to get a share of the export quota. Possibly invest in infrastructure like a dedicated diesel loading facility or jointly invest in a pipeline extension. Start delivering trial cargoes to Asia (e.g. one to China by rail, one to a Singapore trader by sea) to demonstrate reliability.
In the long term (2030 and beyond): Kazakhstan will allow more open exports. At that point, new entrants that have laid the groundwork can scale up quickly, effectively becoming established exporters with market presence in China/Asia. There could be opportunities to expand into related sectors – e.g. exporting jet fuel to airlines in Asia or supplying fuel retail networks in Central Asia. Companies might even explore creating a Kazakhstan trading hub – for instance, using the Aktau port and free zones to trade not just Kazakh but also Uzbek or Turkmen fuels, turning Kazakhstan into a regional distribution center itself.

One more opportunity is the swap model: If direct export is bureaucratic, a company could swap Kazakh diesel with Russian or Chinese internal distributions. For example, deliver diesel to northern Uzbekistan (freeing Uzbek output for export which the company then sells as “Uzbek” origin abroad). These creative arrangements can circumvent bottlenecks but require trust and multi-country coordination.

In conclusion, new companies can find a foothold by leveraging Kazakhstan’s upcoming surplus capacity, aligning with national strategies, and intelligently managing the supply chain. The prize is significant – positioning oneself in an emerging export stream from a country with huge resources and a strategic location bridging Europe and Asia. With Europe seeking non-Russian fuels and Asia’s demand still growing, Kazakhstan’s EN590 diesel could become a valuable commodity on world markets in the late 2020s. Those who prepare now, forging the right partnerships and understanding the intricacies, will be ready to capitalize as this new export chapter unfolds.