Kazakhstan is continuing efforts to secure a long-term agreement with Russian state-owned Gazprom for the supply of natural gas to the country’s remote northern and northeastern regions. However, ongoing price disagreements have delayed the conclusion of the deal.
At a press conference on Wednesday in Astana, Energy Minister Erlan Akkenzhenov confirmed that Kazakhstan still aims to receive around 10 billion cubic meters (Bcm) of gas per year from Gazprom. The country had hoped a proposed natural gas pipeline linking China and Russia via Kazakhstan would help finalize the deal at the desired price, but recent statements from China have raised doubts about the project’s viability.
While Kazakhstan’s natural gas production is on the rise, with output expected to reach 34.6 Bcm annually by 2030, the country’s producing fields are located far to the west. This creates logistical challenges for delivering gas to the north and northeast, areas that are closer to Russian pipeline infrastructure.
Talks between Kazakhstan and Gazprom are ongoing, following a roadmap agreement signed last year aimed at reaching a binding deal. However, disagreements persist over the price Kazakhstan will pay for the gas. Domestic prices for natural gas in Kazakhstan are regulated at around $50 per thousand cubic meters, which is lower than Gazprom’s domestic prices in Russia.
Akkenzhenov emphasized that the terms of the deal should benefit both Russia and Kazakhstan. He added that the decision now rests with the Russian side, and Kazakhstan is prepared to sign the long-term agreement as soon as possible, with hopes of concluding talks by the end of this year.
Once an agreement with Gazprom is in place, Kazakhstan plans to expand its regional pipeline networks in the north and northeast to distribute the gas. Gazprom, which halted pipeline supplies to Europe in 2022 due to international sanctions over Russia’s war in Ukraine, has been exploring new markets, including Central Asia.
In 2023, Gazprom reversed the flow of an old pipeline to begin supplying gas to Uzbekistan, and volumes are expected to increase from 5.6 Bcm in 2024 to 7.3 Bcm later this year. Kazakhstan hoped to secure long-term supplies by offering Gazprom the opportunity to build a pipeline across its eastern region to China, with an annual capacity of 35 Bcm.
Gazprom already operates the Sila Sibiri 1 pipeline to China and is building two additional pipelines: one from Sakhalin Island and another across Mongolia to China. However, China’s Ambassador to Russia, Zhang Hanhui, expressed skepticism about the feasibility of a new pipeline through Kazakhstan due to high costs, suggesting that alternatives like the Sila Sibiri 2 pipeline or liquefied natural gas (LNG) would be more viable.
In response, Akkenzhenov said Russian officials had assured him that discussions on gas deliveries to Kazakhstan and China are continuing. If a deal with Gazprom is not reached, Kazakhstan could extend its domestic Saryarka pipeline to the north and northeast. However, this would take longer than securing Russian gas supplies, Akkenzhenov noted.
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