Kazakstan Moves into Chinese Oil Market

The first successful deliveries of Kazak oil to China will not impact negatively on Astana’s relationship with Russia, say experts. China, which sees Russia and Kazakstan as its best sources of energy imports in the long term, is not going to create opportunities for increased competition between the two countries.



KazTransOil reports that exports via the Atasu-Alashenkou pipeline to China’s Xinjiang autonomous region will reach 20 million tons per year once the pipeline network has been extended from 962 to 3,000 kilometres. But even if that pipeline is used to its maximum capacity, Kazakstan will not offer serious competition to China’s other energy suppliers –Gulf states, Venezuela and Russia.



Kazakstan is trying hard to diversify its energy export routes, by lobbying for oil sales to China and Russia as well as to European markets. Experts say that while Kazak efforts to supply oil to Europe may be a sore point for Moscow, it will not be against working with Kazakstan to open up the huge Chinese energy market, particularly given the proximity of Kazak oilfields to China.



Analysts note that exporting oil is more important for Kazakstan than for Russia, since the Central Asian state’s economy is less diversified. So while many in Russia are suspicious of the rapid growth of Chinese-Kazakh relations, it is unlikely that tensions will develop between Moscow and Astana over the issue.



Some even predict that a multi-vectored approach to energy exports that decreases Kazakstan’s dependence on Russia will lead to a qualitatively new relationship founded on equal partnership. Analysts maintain that Russia will then become more attentive to its Central Asian partners.



At present, most of China’s oil comes from the Gulf and Venezuela. But the geographical remoteness of these sources, as well as the absence of any powerful political leverage over them, give China more of an incentive to partner with its neighbours Russia and Kazakstan, both major energy exporters. In the context of the Shanghai Cooperation Organisation, which is helping to strengthen political ties between member states, Beijing has even greater reason to develop and strengthen its relationship with Russia and Kazakstan.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)