Kazakhstan says Kondensat refinery to process Russian oil

Kazakh Energy Minister Yerlan Akkenzhenov announced on Tuesday that the Kondensat oil refinery in the West Kazakhstan region will begin processing Russian crude under a bilateral arrangement. Under the terms of the agreement, 70 percent of the facility's refined output will be exported to Russia while the remaining 30 percent of in-demand petroleum products will remain in the domestic market, according to the minister's briefing in the capital.

The facility currently lacks pipeline connections to either Kazakhstan's or Russia's national pipeline systems, meaning refined products will be transported exclusively by rail. Akkenzhenov indicated that the railway's capacity will determine shipment volumes, noting that reconstruction work is underway at the plant to expand operational capabilities.

Sanctions clearance

Akkenzhenov dismissed concerns about potential Western sanctions targeting the arrangement, stating that the enterprise operating the refinery does not appear on any restrictive lists. "I believe these are normal conditions. The owner (of the enterprise running the refinery) is not included on any sanctions lists, so we won't be affected by the sanctions," he said, according to Russian state news agency Tass.

The minister emphasized that the project secures additional foreign investment for Kazakhstan and guarantees employment stability for local workers. "If the owner wants to ship products now, that's no problem. Everything depends on the railway's capacity. I know they're undertaking some reconstruction work at this plant to increase capacity. The benefits for us are additional investment in our country and job security," Akkenzhenov added.

Production outlook

The energy ministry has revised downward its oil production forecast for 2026, adjusting the target from 98 million tons to 96 million tons amid infrastructure challenges. Akkenzhenov attributed the 3.5 million ton reduction to sustained attacks on the Caspian Pipeline Consortium infrastructure that have disrupted export routes.

The adjustment comes as Ukrainian long-range drone strikes continue to target Russian oil refineries, forcing multiple facilities to suspend operations or undergo extended repairs and tightening fuel supplies across several Russian regions.