08.04.2022 Author: Petr Konovalov

China-Kazakhstan Energy Partnership

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Despite all the turmoil of early 2022, China and Kazakhstan continue to develop their energy cooperation with confidence.

On September 29, 2021, at the international scientific conference “Energy Silk Road in Central Asia: results and prospects of oil and gas cooperation”, the Deputy Minister of Energy of the Republic of Kazakhstan, Aset Magauov, announced that his country intends to continue developing cooperation with the People’s Republic of China in the gas sector.

During the entire period of cooperation, the PRC has been able to establish itself as a reliable and trustworthy strategic partner, Magauov said. The statesman noted the active and positive role of the Chinese company CNPC, which participates in many energy projects in Kazakhstan.

Big reforms are coming to Kazakhstan’s gas market. The main thrust of the change will be to further stimulate gas production. Magauov is confident that cooperation with China in the gas sector will bring many benefits to Kazakhstan and have a positive impact on its development. The Deputy Minister of Energy said his country plans to significantly increase its capacity to produce energy resources for export to China. Magauov added that Kazakhstan had managed to form the basis for the development of a modern “Silk Road energy route” thanks to the competent actions of the country’s first president, Nursultan Nazarbayev, as well as thanks to intensive dialogue with the Celestial Empire.

Over the years of Kazakhstan’s independence, several pipelines have been built to transport energy resources: the Kazakhstan-China oil pipeline, built in the 2000s, which allows direct supply of Kazakh oil to the PRC, the Sarybulak-Zimunai and Beineu-Bozoi-Shymkent gas pipelines, launched in 2013, and the Kazakhstan-China gas pipeline, which was created to transit Turkmen gas and is part of the Turkmenistan-China gas pipeline, and in 2013-2016 was supplemented with the Beineu-Bozoi-Shymkent section, which transmits Kazakh gas.

The construction of these infrastructure facilities has had a positive impact on the growth of Kazakhstan’s economy.

China’s warm diplomatic relations with Central Asian countries, through which China’s infrastructure networks run, have enabled it to transport some 147 million tonnes of oil and 44 billion cubic meters of gas since the Kazakhstan-China pipeline began operations. Such high figures clearly demonstrate the great importance of the “Silk Road energy route” not only in the Central Asian region, but also globally.

Today, the PRC is the second most important partner of Kazakhstan in both import and export. The Celestial Empire accounts for approximately 12% of all Kazakhstan’s exports. This Central Asian state supplies China mainly with natural gas, oil and petroleum products.

The mass unrest in Kazakhstan, which began on January 2, 2022, could have a very painful impact both on Chinese-Kazakh economic cooperation and on the well-being of the country as a whole. In the dark days of unrest, militants could destabilize the state and inflict very tangible damage on Kazakhstan’s energy infrastructure, which could halt a number of joint Chinese-Kazakh projects.

On January 10, 2022, during a conversation with Kazakh Foreign Minister Mukhtar Tleuberdi, Chinese Foreign Minister Wang Yi said that his country has been a permanent strategic partner of Kazakhstan, and also noted that the PRC can help the Central Asian state to stop the bloodshed and protect public order and stability in this extremely difficult time for the country.

Thanks to the swift and competent action of the countries of the Collective Security Treaty Organization (CSTO), of which Kazakhstan is a member, the unrest was halted in the shortest possible time. Kazakhstan’s CSTO allies demonstrated their friendly attitude and helped the state to avoid falling into chaos.

On January 29, 2022, Kazakh President Kassym-Jomart Tokayev said his country is interested in developing further investment and trade-economic partnerships with China. Kazakhstan should continue to expand its cooperation with China, Tokayev said, because the Celestial Empire is an advanced country, a leader in high-tech development, including those related to artificial intelligence, and has made tremendous progress in its economic development overall. Kazakhstan’s president noted that China is his country’s closest neighbor. The head of state said that a large number of economically important Kazakh enterprises, which produce strategic goods, as well as agricultural producers, rely heavily on the Chinese market. Kassym-Jomart Tokayev advised Kazakh citizens to start learning the Chinese language to accelerate and strengthen the dialogue between the two peoples. He also added that in 2021 the trade turnover between Kazakhstan and the PRC reached $18.5 billion: it should be noted that this is a very high figure.

On March 21, 2022, Chinese Ambassador to Kazakhstan Zhang Xiao negatively characterized the sanctions imposed by the US and its allies against the Russian Federation. According to the diplomat, the sanctions will lead to nothing good, but will worsen international relations and cause negative consequences in the foreseeable future. The position of China’s ambassador to Kazakhstan clearly demonstrates his country’s aspirations to increase its economic influence in the Eurasian space.

On the same day, March 21, 2022, representatives of Russia and Kazakhstan agreed to organize a working group on increasing oil transit to the PRC through the territory of Kazakhstan.

Earlier, in early February 2022, the aforementioned Chinese company CNPC and Rosneft signed an agreement to supply 100 million tonnes of oil for 10 years (until December 31, 2033) to refineries in northwestern China. The delivery of raw materials will go through Kazakhstan.

Before that, representatives of Russia and Kazakhstan discussed opportunities for further dialogue between the two states in the fuel and energy sector, including oil and natural gas production and transportation, as well as in the electricity sector.

In conclusion, there is good potential for expanding and deepening the energy partnership between China and Kazakhstan. First, both sides will benefit economically. Kazakhstan will increase its hydrocarbon exports and China will gain more energy to continue developing its economy. Second, their bilateral relations will be further strengthened.

Also, the two countries’ relations with Russia will become stronger with the implementation of Russian oil transportation projects. This is important: amid today’s difficult geopolitical environment, the signing of contracts and the willingness of the countries’ leaders to cooperate with each other help to create a zone of stability in Central Asia, which contributes to de-escalating international tensions.

Petr Konovalov, a political observer, exclusively for the online magazine “New Eastern Outlook”.

 


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