ASTANA – Kazakhstan is positioned as a vital gas exporter due to its strategic location near Russia, China, Central Asia, and the Caspian region. Traditionally, Kazakhstan has focused on exporting gas to the Commonwealth of Independent States (CIS). However, with Europe searching for alternatives to Russian gas, demand for Kazakh gas in European markets is rising. Despite this shift, China remains Kazakhstan’s largest gas export market.
In 2023, Kazakhstan exported 5.3 billion cubic meters of natural gas, an 8% increase from 2022’s total of 4.6 billion cubic meters, achieving 85.1% of its annual target. The overall decrease in gas exports has allowed for more gas to be available in the domestic market. In 2021, gas exports were at 16 billion cubic meters, a 19.2% drop from the previous year.
China has been the main consumer of Kazakh gas in recent years. In 2023, exports to China reached 5.857 billion cubic meters, up 15.5% from 5.07 billion cubic meters in 2022. In contrast, exports to China in 2021 totaled 5.6 billion cubic meters, compared to 7.37 billion cubic meters in 2020.
From January to August 2023, Kazakhstan’s gas exports to Russia fell to 3.6 billion cubic meters, down from 7.9 billion cubic meters in 2022, a decrease of 2.7%. In 2021, Russia received 8.2 billion cubic meters, and in 2020, the figure was nine billion cubic meters. The peak for exports to Russia was in 2017, at 14.7 billion cubic meters.
Exports to Uzbekistan peaked in 2017 at 1.5 billion cubic meters but fell to 400 million cubic meters in 2019 and 100 million cubic meters in 2020. No exports were reported to Uzbekistan in 2021 or 2022.
Kazakhstan’s suppliers were unable to enter the Ukrainian market in 2023, as they had in 2021. However, in 2022, Kazakhstan exported 108.4 million cubic meters of gas to Ukraine, generating $13.546 million in revenue. Exports to Ukraine reached 600 million cubic meters in 2020.
In 2019, Kazakhstan’s non-CIS gas exports surged to 7.4 billion cubic meters, maintaining the same level in 2020. Switzerland accounted for 3.2 billion cubic meters of this total. However, exports declined to 6.4 billion cubic meters in 2021 and further dropped to 5.1 billion cubic meters in 2022.
Kazakhstan ranks 22nd globally and third among CIS countries in gas reserves, following Russia and Turkmenistan.
Looking ahead, Kazakhstan aims to produce 60.5 billion cubic meters of gas in 2024, a 2.3% increase from 2023’s output of 59.1 billion cubic meters. By 2030, production is expected to reach 91 billion cubic meters. In 2022, production exceeded targets, reaching 53.3 billion cubic meters. Marketable gas—processed and purified gas ready for sale—was 27.8 billion cubic meters, or 94% of the 2022 plan. In 2021, output was slightly lower at 53.8 billion cubic meters.
Kazakhstan has about 79 gas production companies, with 23 supplying gas to the domestic market and for export.
Kazakhstan’s Role in Central Asia’s Gas Network
Kazakhstan also serves as a major gas transit hub in Central Asia, facilitating gas transport from Turkmenistan and Uzbekistan to China and Russia. Uzbekistan’s gas shortages have allowed Kazakhstan to increase transit volumes and revenue. In 2023, Kazakhstan transported 1.28 billion cubic meters to Uzbekistan, with plans to raise this to 11 billion cubic meters.
Oil and gas expert Abzal Narymbetov expects transit demand to grow. The Central Asia-Center pipeline previously supplied Uzbekistan’s gas to Russia and Europe, but recent shortages have prompted Uzbekistan to purchase Russian gas.
“In the first quarter alone, Uzbekistan signed a $320 million deal with Gazprom,” Narymbetov said. “This trend will likely continue as Uzbekistan’s electricity sector, which relies on gas for 85% of its needs, faces rising demand. This situation offers Kazakhstan a chance to earn from transit fees.”
Uzbekistan’s gas production dropped from 51.7 billion cubic meters in 2022 to 46.7 billion cubic meters last year. Meanwhile, Kazakhstan aims to maintain its transit revenue by modernizing the Central Asia-Center gas pipeline.
A new agreement between QazaqGaz and Turkmengaz allows Kazakhstan to transit and sell Turkmen gas, benefiting both domestic demand and export commitments. Turkmenistan’s reserves, estimated at 27.4 trillion cubic meters, present a significant opportunity for Kazakhstan. The country also sees potential in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, which could expand its export markets while addressing local shortages.
Kazakhstan’s transit of Turkmen and Uzbek gas to China is expected to increase to 37.1 billion cubic meters this year, a rise of 1.5 billion cubic meters from the previous year. Discussions are also ongoing to enhance Russian gas transit to the Kyrgyz Republic.
Expanding Gas Capacity
Kazakhstan is also exploring ways to boost gas exports to China, including the possible construction of a new pipeline to increase capacity.
In 2018, Kazakhstan committed to supplying China with 10 billion cubic meters annually for five years, but meeting this goal has proven challenging. Exports were 4.4 billion cubic meters in 2022 and 5.8 billion in 2023. During winter shortages, Kazakhstan occasionally halts exports to prioritize local needs.
Kazakhstan’s gas production mainly consists of associated petroleum gas, which requires refining before export. With only two processing plants, the country struggles to meet both export commitments and local demand, often sending raw gas to Russia for refining.
President Kassym-Jomart Tokayev emphasized the need to accelerate the construction of new processing facilities in Zhanaozen, Kashagan, and Karachaganak to attract investment.
During a government meeting on July 16, Energy Minister Almassadam Satkaliyev announced plans for new processing plants, noting interest from Qatari investors.
From 2026 to 2030, four new plants are planned, including two at Kashagan with capacities of one billion and 2.5 billion cubic meters, a four-billion-cubic-meter plant at Karachaganak, and a 900-million-cubic-meter plant in Zhanaozen.
Strategic Expansion
Despite facing capacity challenges, Kazakhstan remains committed to supplying gas to China. Following a presidential visit to Beijing, QazaqGaz extended its agreement with PetroChina until 2026.
QazaqGaz, in partnership with Chevron Corporation and its subsidiary Chevron Munaigas Inc., signed a contract for potential geological exploration at the Zhalibek site in the Aktobe Region.
Sustaining these exports depends on expanding the Beineu-Bozoi-Shymkent pipeline, which feeds into the Central Asia-China pipeline. This route has an annual capacity of 15 billion cubic meters, compared to Russia’s Power of Siberia pipeline, which can handle 38 billion cubic meters. Kazakhstan plans to build a second line for the Beineu-Bozoi-Shymkent pipeline by 2026-2027.
Customs data indicate that gas exports to China generated $1.467 billion last year, with Kazakhstan’s average price at $250.43 per thousand cubic meters, slightly below Russia’s $257 rate. While Kazakhstan cannot match Russia’s export volume, its competitive pricing strategy remains a key advantage. Russia plans to reduce its price for China to $227.8 by 2027, heightening competition in the market.
The Power of Siberia pipeline, Russia’s main route to China, transported 22.7 billion cubic meters last year. Plans for the Power of Siberia-2 pipeline could further challenge Kazakh exports.
Kazakhstan has also considered a pipeline through its territory to meet northern demands of two billion cubic meters per year, although Russia has chosen Mongolia as the transit route.
In July, Satkaliyev announced that Russia could supply gas to northern and eastern Kazakhstan.
“The Ministry of Energy is evaluating two options for gasifying the northern and eastern regions,” he stated. “One option involves extending gas service to the Akmola and North Kazakhstan regions by advancing the second and third stages of the Saryarka gas pipeline, depending on completing the second line of the Beineu-Bozoi-Shymkent pipeline. A feasibility study is currently underway. The second option is to supply gas directly from Russia.”
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