Petrochemical industry

Petrochemical industry

Investment proposals

Oil Reserves

12
in the world
13,2 billion tons
Geological reserves of oil
4,4 billion tons
Recoverable reserves
90 million tons in 2023
60% of Tengiz, Kashagan and Karachaganak

Natural gas reserves

3,9 Trillion m3
The geological reserves of gas
2,2 Trillion m3
dissolved
1,7 Trillion m3
free
59,1 m3 in 2023
76% of Karachaganak, Tengiz, Kashagan

The petrochemical industry has a high potential to attract foreign direct investment

The raw orientation

The output of high added value (e.g., new synthetic materials)

Natural, associated petroleum gas and gas condensate deposits - a valuable raw material for gas chemistry

methane
Ethane
propane
Bhutan

*Gas from Caspian sea fields contains 9-13% of ethane.

For the profitable development of the petrochemical content of ethane in the gas must be at 8%.

GOVERNMENT SUPPORT*:

Matrix EN

Location close to major markets

Forecast for major agroindustrial complex in 2015-2020
Billion USD
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CACR 2015-2020%
Fertilizer market 2015
Agroindustrial complex growth
Reducing the difference between global supply and demand 2015-2020
Billion USD
Margin reduction
Nitrogen
Phosphorus
Potassium

Countries with the greatest increase in productive capacity

Nitrogen

USA
Saudi Arabia
Egypt

Phosphorus

Morocco
China
Saudi Arabia

Potassium

Canada
Russia
Turkmenistan

Prospects of commencing production in Kazakhstan are promising due to the disparity between global demand and supply of nitrogen fertilizers.

The primary markets for fertilizer (Russian Federation and China) are in close proximity to the Republic of Kazakhstan.

The distance from countries experiencing the highest growth in production capacity renders the final export costs from the Republic of Kazakhstan more competitive.

STATE SUPPORT:

Maintenance with raw materials of strategically important investment projects

Granting the right for acquisition of the liquefied petroleum gas as raw materials to industrial consumers by state-regulated price
The pricing mechanism for gas commodity for investment projects using gas as feedstock** according to the formula: supply price of gas + the minimum level of margins for national operator (7%)

Important: the investment project must be included in the list of investment projects for the production of petrochemicals of the Ministry of energy of Kazakhstan***

1. The law of RK "On gas and gas supply"

2. The order of the Minister of energy of the Republic of Kazakhstan from December 15, 2014 № 209 "On approval of Rules for determining the maximum wholesale prices of sales of commercial gas in the domestic market of the Republic of Kazakhstan and the marginal prices of liquefied petroleum gas sold in the plan of supply of liquefied petroleum gas on the domestic market of the Republic of Kazakhstan out of electronic trading platforms"

3. The order of the Minister of energy of the Republic of Kazakhstan dated April 29, 2020 No. 165 "On approval of Rules of forming the list of investment projects on production of petrochemical products"

DOCUMENTS

required for inclusion of the project in the List of investment projects for the production of petrochemical products

Application for inclusion of the investment project in the List
Implementation schedule of the investment project
Feasibility study of the investment project

Supporting evidence:

Right to use licensed technology (agreement or other relevant document)
Experience in operating similar facilities and/or marketing products in key markets, along with the proportion of local content in the project

Investors, as part of state support, can receive incentives in the form of in-kind grants, customs and tax exemptions, and investment subsidies, provided they sign an investment contract with the Investment Committee of the Ministry of Foreign Affairs.

An alternative mechanism of state support is the establishment of special economic zones.

Within the framework of the special economic zone, investors can acquire land with all necessary infrastructure, along with tax and customs privileges. Government-financed construction of infrastructure can reduce capital and operating costs by 20% and 15%, respectively.

In both cases, there is an opportunity to attract foreign labor force through simplified procedures.

PLANS IN THE FUTURE TO 2030

Implementation of large-scale production for the manufacturing of high-value-added petrochemical products (polypropylene, polyethylene, polyethylene terephthalate, etc.);
Establishment of a petrochemical cluster in the Atyrau region;
Facilitating technology transfer;
Increasing exports due to the high export potential of petrochemical products;
Implementation of training for highly qualified personnel in the oil and gas industry.
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