Kazakhstan loses oil-processing refinery construction contract in Ceyhan

Kazakhstan has missed out on constructing an oil-processing refinery in Ceyhan, an anonymous source of VK reports.

Last week Russia and Turkey came to an agreement to build an oil-processing refinery in the Turkish port of Ceyhan. Yet, four years ago, Kazakhstan wanted to be the first to realize the project, The specialists of "KazmunayGaz" had been negotiating with potential partners, including Oil India and the Turkish company Calik Enerji, followed by the Italian company Eni. In 2008 the project was stopped.

The oil-processing manager of "KazmunayGaz", Danir Tiesov, said that there were two reasons to stop the project. The first was the change in the general strategy of oil-processing - "We have to keep our own market in order, modernize it" - he said. The second reason is the high price of the project, amounting to billions of dollars. "Our national company can't afford such an expensive project" - he said, adding that Kazakhstan considers this project one possible way to develop the country.

The refinery will possibly become an important point for the world oil industry in general. Ceyhan is very conveniently situated. Several pipelines meet there. About 50 million tons of oil arrive there every year through the pipeline "Baku-Tbilisi-Ceyhan". The Turkish government is planning to construct one more pipeline, "Samsun-Ceyhan", which would carry 60-70 million tons of oil per year. In addition, it is possible that the oil from "Kirkuk-Ceyhan" will be transported to the refinery as well (about 70 million tons per year). Theoretically, three big pipelines will be meeting in Ceyhan, 170 tons of oil per year overall. This is more than the port of Rotterdam, where 150 million of tons of the black gold is delivered every year.

The port of Ceyhan is also very favourably located for business. It is always sunny there and there is little wind.

Prospects seem very good. There are quite a few oil-processing refineries in Turkey. The internal market of the country requires 32 million tons of oil products annually. About 177 million tons of oil will be delivered to the country, so the presence of a refinery could be very useful.