Kazakhstan and China are expected to sign a number of important agreements on new joint oil and gas projects, including at the Caspian shelf, during the forthcoming official visit of Nursultan Nazarbayev to Beijing in April, China’s Ambassador to Kazakhstan Cheng Guoping told New Europe correspondent in Astana Kulpash Konyrova in an interview.

Ambassador, Kazakhstan has been actively developing its export infrastructure towards China. For example, by the end of this year, the second phase of the oil pipeline Kazakhstan – China is expected to be completed. In your opinion, what are the reasons for this?

In fact, such active development of pipeline projects towards China is explained by a number of factors. Firstly, the political one. As you know, Kazakhstan-China relations are at the height of their development now. Since the signing of the Strategic Partnership Agreement in 2005, our relations have been growing stronger each year. Secondly, China’s demand for energy resources is growing each year. Last year, we imported about 200 million tonnes of oil. This year, this indicator may exceed last year’s and reach 300 million tonnes. And thirdly, after entering the Kazakhstan market, CNPC has been maintaining close contacts with its main partner, national company KazMunaiGas (KMG). China is Kazakhstan’s third largest trade partner. Its share in Kazakhstan’s foreign trade is over 10 percent. Over the years of cooperation, China’s investments in Kazakhstan’s economy have totaled around USD 10 billion. Chinese companies CNPC, SINOPEC and CITIC are active in oil production. Today, the volume of Kazakh oil produced with participation of the Chinese companies is about 20 million tonnes, out of which the purely Chinese share is about 13 million tonnes.

What suppliers does the Chinese side count on to fill the Kazakhstan-China oil pipeline? Will non-Chinese companies be among them? Currently, our main partner in this project is Kazakhstan, and there is no third party yet.

Reportedly, Chevron has agreed to transport its Kazakhstan- produced crude towards China by this pipeline.

This is still at the level of discussion.

As is known, the Chinese state investors acquired several oil companies and then re-sold some stakes in those companies to KMG. Is the idea of such a strategy that each such transaction increases the probability of the next one, or is it also used to resolve other tasks?

Yes, CNPC has done such deals. First it buys and then transfers a part of its shares to the Kazakh side. This is our general policy in Kazakhstan. Its purpose is to provide development to both parties on the basis of mutual benefit. We seek to provide a real benefit to both sides from this cooperation.

Earlier, the idea of building a joint Kazakhstan-China refinery in the frontier zone was discussed. What has become of it?Has it been postponed or found unprofitable?

Indeed, the two parties discussed a new refinery in the frontier zone. It is on the table again, but the parties have not reached any final agreement on it.

What would be the capacity of the future refinery?

We already have one near-border refinery in Dushanzi. Its design capacity is five to six million tonnes of crude per year. I think the new plant should have a greater capacity than the existing one.

Will China finance this project should Kazakhstan fall short of cash?

China has both finances and technology. Of course, with the agreement of both parties, China will be able to invest in the frontier refinery. Upon completion of the second phase of the pipeline Kazakhstan-China that will be put in operation by the end of this year, the total volume of crude transport will be 20 million tonnes. Based on this, a refinery is necessary. And, as we know, Kazakhstan today has high demand for oil products.

The Kazakh media has reported that CNPC is negotiating the acquisition of 50 percent of Mangistau Munai Gas (MMG).

This is exactly one of the questions that will be discussed during the official visit of the Kazakhstan leader Nursultan Nazarbayev to China this April. It is expected that the parties will sign a number of important documents concerning future cooperation in the oil and gas sector.

Can it be supposed that the new projects to be discussed at the highest level will include Caspian offshore fields? Is China planning to acquire any shelf field?

China is willing to participate in the development of the Kazakhstan part of the Caspian shelf. We have adopted an investment programme for that.

As is known, India and China are among the largest energy consumers in the world. Some Indian experts visiting us said that it was in Kazakhstan that the former competitors could unit their efforts in the production and transport of fuel. What would you say in this regard?

We have noticed that after the recent visit of Nursultan Nazarbayev to Delhi, the Kazakhstan-Indian relationship has received a new impetus. China supports multilateral cooperation, but for the present China’s main partners in Kazakhstan are the Kazakh companies only.