Kazakhstan’s Oil Refining Ambitions: What the 2025–2040 Strategy Means for Buyers

A Strategic Inflection Point for Kazakhstan’s Refining Sector

Kazakhstan’s government approved a national petroleum refining strategy in 2024 that sets out ambitious targets through 2040. For international petroleum buyers, commodity traders, and energy investors who source from or compete with Kazakhstan-origin products, understanding this strategy is not an academic exercise — it will materially change the volume, quality, and price dynamics of Kazakhstani petroleum exports over the next fifteen years.

This article analyses the strategy’s key pillars and draws out the practical implications for each buyer segment.

The Core Targets of the 2025–2040 Strategy

The strategy sets three headline targets. First, increase total domestic refining capacity from the current 19 million tonnes per year to 40 million tonnes per year by 2040. Second, build a fourth greenfield refinery by 2033, to be located in central or eastern Kazakhstan to serve domestic demand growth and Chinese export routes. Third, upgrade product standards across all three existing refineries from Euro-5 to Euro-6 compliance by 2030.

These targets are backed by government capital allocation and supported by KazMunayGas, the national oil company, which is the strategic operator of the refining sector. Chinese investment partners (CNPC at Shymkent, various state funds) are expected to co-finance the capacity expansion at Shymkent and the new fourth refinery.

Implication 1: Increased Export Availability

If the 40 million tonne refining capacity target is achieved — even partially — Kazakhstan’s exportable petroleum product surplus will expand significantly. Current domestic consumption is approximately 10–11 million tonnes per year, a figure that will grow modestly with population and economic growth. A refining capacity of 40 million tonnes would generate 25–30 million tonnes of annual export potential, compared to roughly 4 million tonnes today.

For buyers, this signals a structural shift from Kazakhstan being an occasional or supplemental supplier to becoming a major, consistent origin for CIS, Central Asian, Chinese, and potentially European markets. Buyers who establish term contracts and supplier relationships now will be better positioned to access this expanded supply on favourable terms.

Implication 2: Euro-6 Product Upgrade

The transition from Euro-5 to Euro-6 standards means tighter sulphur specifications (10ppm remains the limit but with tighter aromatic and nitrogen compound controls), improved combustion quality, and broader acceptance by Western European buyers and transit country authorities. Euro-6 diesel from Kazakhstan would be eligible for sale into EU markets under the Generalised Scheme of Preferences Plus (GSP+) arrangement, a market currently served by more expensive Middle Eastern and North Sea product.

Buyers currently sourcing Euro-5 EN590 from Kazakhstan should begin incorporating Euro-6 qualification clauses into medium-term contracts so that supply can transition seamlessly as refinery upgrades complete.

Implication 3: Fourth Refinery and Product Diversification

The planned fourth refinery, expected to enter construction by 2028–2029, is anticipated to specialise in petrochemical feedstocks and high-value refined products rather than commodity fuels. This would reduce Kazakhstan’s reliance on basic fuel exports and create new product categories — including naphtha fractions, chemical-grade LPG, and potentially lubricant base oils at higher viscosity grades.

For traders and blenders, this opens prospective supply relationships in product categories where Kazakhstan currently has limited export volume. Early engagement with KazMunayGas and domestic traders like LLP Kamenistoe-Neft will be important for buyers who want to be allocated supply from the new facility when it comes online.

Implication 4: Infrastructure Investment Supporting Export Growth

The strategy is accompanied by parallel infrastructure investment: expansion of Kuryk port on the Caspian Sea, increased rail tanker fleet procurement by national rail operator KTZ, and feasibility studies for a Trans-Caspian pipeline that would allow direct product flow to Azerbaijan and onward to Turkey and Europe without transhipment.

If the Trans-Caspian pipeline advances from feasibility to construction — a process that faces geopolitical complexity but has renewed support from the EU’s Global Gateway initiative — it would cut transit times and costs for European buyers by approximately 40% compared to current Caspian tanker and rail routing.

What Buyers Should Do Now

The 2025–2040 strategy creates a favourable long-term supply environment but requires buyers to act ahead of the volume increase rather than reactively. Establishing a qualified Kazakhstan supplier, understanding the documentation and inspection framework, and building logistics relationships with Caspian and rail freight partners now will provide competitive advantages when expanded supply hits the market.

LLP Kamenistoe-Neft is actively expanding its trading capacity in preparation for the growth in export volumes. We work with buyers on term supply agreements, trial shipments, and market entry support for buyers new to Kazakhstan-origin product. Contact our trading desk to discuss how the 2025–2040 strategy affects your procurement planning.

Explore further: Kazakhstan energy market overview — Kazakhstan’s three major refineries — Our refinery operations — Export and trading desk