KazMunayGas Holds Negotiations on Urea and Polyethylene Projects

Askhat Khassenov, the Chairman of the Management Board of NC KazMunayGas JSC (KMG) held some meetings with the heads of CNPC and Sinopec during his visit to China. They discussed joint projects in oil and gas chemistry, geological exploration, oil refining and transportation.

Together with Hou Qijun, CNPC President, they discussed the Urea Project at the Zhanazhol Gas Processing Plant. The Project is important for the gas chemical industry and agriculture in Kazakhstan. Urea is the demanded nitrogen fertilizer and the country’s demand is 350,000 to 400,000 tonnes. In July, KMG and CNPC signed an agreement to intensify cooperation and produce urea and other products. Previously, KMG PetroChem LLP (a subsidiary of KMG) and CNPC-Aktobemunaigas JSC had reached a preliminary agreement on the development of a feasibility study for the project. The agreement was confirmed at the meeting. The expected production capacity is up to 1.2 million tonnes of urea per year, the cost of the project is about 1.5 billion U.S. dollars, the number of jobs is 3,000 during construction and about 400 in the subsequent operation of the plant. There are arrangements with technology licensors and with the world’s leading fertiliser trader for the export of urea.

Other topics of the negotiations with CNPC included geological exploration projects, the processing of gas from the Urikhtau field, the expansion of the Shymkent Refinery (PKOP LLP) and the necessary increase in the capacity of the Atyrau-Kenkiyak and Kenkiyak-Kumkol pipelines.

A. Khassenov met Ma Yongsheng, Chairman of the Board of Directors of Sinopec, in Beijing. They discussed joint projects for the production of polyethylene, terephthalic acid and polyethylene terephthalate (TPA and PET) with an investment volume of more than 8 billion U.S. dollars.

The KMG and Sinopec teams have finalised the pre-feasibility studies and are working on entering the FEED phase. Some promising geological exploration projects were also discussed.

During the constructive business negotiations, the parties emphasised that the implementation of joint projects would contribute to further strengthening the successful strategic partnership between the companies of the two countries.

For reference:

CNPC (China National Petroleum Corporation) is a leading oil and gas company in China, founded in 1988. Main business areas are oil and gas exploration and production, oil refining, petrochemicals production and petroleum products marketing. CNPC is also the parent company of PetroChina, one of the largest public oil and gas companies in the world.

Sinopec (China Petroleum & Chemical Corporation) is the largest petrochemical company in China, founded in 2000. Main business activities are oil and gas production, oil refining, petrochemicals production and petroleum products marketing.

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