Kazakh Senate ratifies agreement on oil exports to Uzbekistan

  • Mar 14, 2019
  • Azernews

By Abdul Kerimkhanov

Kazakhstan and Uzbekistan have built a solid foundation of sovereign statehood and are looking to the future with confidence.

In Kazakhstan, the deputies of the Senate at the plenary meeting adopted the Law of the Republic of Kazakhstan on ratification of the framework agreement of Kazakhstan and Uzbekistan on cooperation in the field of energy, reports Bnews.kz.

The parties will cooperate in the oil and gas industry, petrochemical and electric power industry.

Kazakhstan within the framework of this Agreement plans to export up to 5 million tons of oil per year to Uzbekistan. The relevant Agreement was concluded in Tashkent on September 16, 2017.

"The agreement is aimed at strengthening friendly relations between the two countries. It encouraging cooperation in the oil and gas sector, oil and gas chemistry and power generation, uninterrupted supply of natural gas to the southern regions of Kazakhstan, as well as mutual interest in developing the transit potential of the gas transportation system of the parties to the Agreement," reminded the Committee of the Kazakh Senate on economic policy, innovative development and entrepreneurship.

The Agreement also provides for the establishment of a coordinating council that will regulate and control the timely implementation of all norms of the Agreement.

"The agreement regulates that the Kazakh side, prior to the commissioning of the Shymkent-Jizzak trunk oil pipeline, taxing oil transportation services through the trunk pipeline with a value-added tax at a zero rate. At the same time, for the purpose of returning the value-added tax in accordance with the tax legislation of Kazakhstan, transportation services oil through the trunk pipeline is considered by the Kazakh side as an international shipment," added the Committee.

As the Minister of Energy of Kazakhstan Kanat Bozumbayev reported in late February, Kazakhstan delivered more than 260,000 tons of oil to Uzbekistan over 2018.

"Kazakhstan is ready to continue to supply oil to Uzbekistan from its own resources through the Kenkiyak-Kumkol pipeline and further with transhipment to the railway tank at Shagyr station. Currently, the tariff for this route is $ 25.12 per ton," the minister said.

Diplomatic relations between Kazakhstan and Uzbekistan were established on November 23, 1992.

Uzbekistan and Kazakhstan currently experience a rise in mutual economic ties. In January-June 2018, the trade turnover between the two countries increased by 52 percent, with Uzbek exports growth of 48 percent. Over 200 companies with Kazakh capital currently operate in Uzbekistan.

The countries agreed to take further measures to ensure the growth of trade turnover to $ 3 billion in 2018 and $ 5 billion by 2020. The countries also intend to increase the number of rail, bus and air communication between two states.

Kazakhstan exports to Uzbekistan petroleum and their products, the milling industry, grains, ferrous and non-ferrous metals, products of inorganic chemistry, food products.

Uzbekistan exports to Kazakhstan energy sources (gas), cotton fiber, chemical products and plastics, fertilizers, fruits and vegetables and other types of goods.

Uzbek investments in Kazakhstan for the past 10 years amounted to $ 31.3 million, half of which falls for 2016. Kazakh investments in Uzbekistan totalled $ 114.4 million in the past decade.