April 20, 2018 / 2:20 PM / a year ago

Kazakhstan to slash heavy oil exports as it goes upmarket

MOSCOW, April 20 (Reuters) - Kazakhstan will sharply cut exports of heavy oil products, such as fuel oil and vacuum gasoil, as it focuses on higher quality products following a modernisation of its refineries, according to traders and Reuters calculations.

The Central Asian country’s oil refineries could reduce fuel oil exports by around 35 percent this year, from 2.1 million tonnes in 2017, while vacuum gasoil (VGO) overseas shipments could be halved to 800,000 tonnes.

Kazakhstan exports its heavy oil products mainly via Black Sea’s ports in Russia and Georgia. It has been upgrading its three refineries in order to produce better quality products and reduce pollution.

Pavlodar refinery has already completed its modernisation programme. Atyrau refinery plans to launch new units by June, while Shymkent is expected to wrap up a modernisation in September.

According to the energy ministry, the refineries plan to increase their oil products throughput to 15.3 million tonnes this year, from 14.2 million tonnes last year.

Fuel oil production is seen declining to 2.4 million tonnes, from 3.3 million tonnes. It exports virtually all of its VGO output, but will end production of the fuel in the third quarter of this year. (Reporting by Alla Afanasyeva; writing by Vladimir Soldatkin; Editing by Susan Fenton)

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