Kazakhstan Pushes Forward Petrochemical Expansion with $15 Billion Investment Scheme
Shift Happens: Kazakhstan's Petrochemical Boom
Get a load of this, Kazakhstan is transforming their oil and gas industry into a high-worth manufacturing powerhouse, with a focus on petrochemicals as their golden ticket.
📸 Credit: Shutterstock
Back in May, Energy Minister Yerlan Akkenzhenov rolled out a game plan for 2024-2030 – yep, you heard that right, we're talking ten years – during a government meeting. A ten billion dollar gamble if you will, that promises around 3,500 permanent and a whopping 16,000 temporary jobs.
Last year, petrochemical production was at 540,000 tons, a whopping 50% increase from the previous year. March saw the launch of a paraxylene production unit at the Atyrau oil refinery, netting an extra 33,800 tons to the production.
Infrastructural development is happening in the National Industrial Petrochemical Technopark, with 18 projects backed and ready including polypropylene, polyethylene, and synthetic rubber production.
Akkenzhenov dishes on some major future moves, like polyethylene, PET, alkylate, and urea plants, with launches expected between 2027 and 2029.
The government is brewing up a new law on the petrochemical industry, one that'll keep raw materials fair game and introduce tax and financing incentives. It's all about getting those high-value goods rolling.
Prime Minister Olzhas Bektenov chimes in, stressing the significance of the chemical industry, particularly in supporting agriculture, mining, metallurgy, and construction.
In 2024, the chemical sector grew 7.7%, petrochemicals climbing over 50%. Exports of chemical products hit two billion dollars, a 13% increase from 2023. The sector kept on expanding in January-March, swelling by 12.5%.
With 12 major chemical and petrochemical plants in its pocket, including the mega polypropylene facility in Atyrau, Kazakhstan's construction of a polyethylene plant, their largest industrial project to date, is underway. Other key projects pipelined include sodium cyanide, ammonium sulfate, butadiene, urea, and PET production.
The government's got their eyes on snagging private investment, improving the investment climate, and passing a law on the petrochemical sector by September.
Now let's dive a little deeper into the nitty gritty...
Here's the lowdown on KazMunayGas's push for petrochemical domination in Kazakhstan:
Asset Magauov, deputy chief executive officer of KazMunayGas (KMG), spilled the beans on the progress in Kazakhstan's petrochemical sector, a key player in diversifying the national economy.
The KPI polypropylene plant, running since late 2022, has hiked its output by a staggering 73% year-on-year in January-March, reaching a colossal 126,000 tons. By the end of this year, expect annual production to reach 486,000 tons. Since its launch, polypropylene exports have soared ninefold, and domestic consumption is booming thanks to KMG's discount program, giving local manufacturers a boost.
Construction of a massive eleven billion dollar polyethylene plant is underway alongside vital infrastructure. Local engineers are gaining ground via equipment contracts and training programs in partnership with universities and Spanish firm Técnicas Reunidas.
Two new projects are in the works: a billion dollar urea plant and a polyethylene terephthalate (PET) plant to ease import dependency.
KMG is also cranking up the use of polymers, leveling up standards, and cracking down on uncertified imports. Bitumen capacity expanded to 1.25 million tons, more than covering domestic demand.
Going digital, you'll find digital systems popping up across facilities, complete with robotic warehouses.
Whew! Lots of moving parts, but with a solid plan and the right moves, Kazakhstan could soon be a petrochemical force to be reckoned with.
📍 Tidy Bits:
- Kazakhstan's petrochemical development strategy focuses on six major projects between 2024-2030 to expand the oil and gas chemical sector by 2029.
- Infrastructure modernization, gas production targets, commercial gas processing, employment growth, and geological surveys for new fields are key components of the plan.
- This shift is expected to significantly impact local employment, generate over 19,000 jobs in total.
- Akkenzhenov announced a roadmap for Kazakhstan's petrochemical industry, aiming for around 19,000 jobs by 2030 with investments worth $10 billion.
- In 2024, the chemical sector in Kazakhstan expanded by 7.7%, with petrochemicals climbing over 50%, and exports of chemical products reached $2 billion, a 13% increase from the previous year.
- The government plans to pass a law on the petrochemical industry, introducing tax and financing incentives and keeping raw materials fair game to boost high-value goods production.
- KazMunayGas currently has 12 major chemical and petrochemical plants, and the construction of a polyethylene plant, their largest industrial project to date, is underway, with18 projects backed and ready for development in the National Industrial Petrochemical Technopark.
