January 22, 2020 / 2:57 PM / a month ago

Kazakhstan suspends oil exports to China after fresh contamination

ALMATY/MOSCOW (Reuters) - Kazakhstan has suspended its oil exports to China after contamination was found in crude supplied by a Kazakh producer less than a year after a ‘dirty oil’ crisis broke in neighbouring Russia.

Oil exports to China have been suspended because of high content of organic chloride, the Kazakh energy ministry said on Wednesday.

CNPC Aktobemunaigas, a Kazakh subsidiary of Chinese energy group CNPC, has been cut off from the Central Asian nation’s oil pipelines since Jan. 16, pipeline operator Kaztransoil said on Wednesday.

Unlike the Druzhba pipeline problems in April last year, when 5 million tonnes of oil were contaminated with organic chlorides, the origin this time was Kazakh oilfields, though the volume affected remains unclear.

Kazakh oil exports to China will be resumed after the issue with CNPC Aktobemunaigas oil quality is fixed, the Kazakh energy ministry said.

CNPC Aktobemunaigas did not reply immediately to a request for a comment.

Kaztransoil has also reviewed shipment plans for the Shymkent and Pavlodar oil refineries, it said without providing any details on volumes.

The impact in terms of volume does not seem to be considerable, given that the Pavlodar refinery has been running close to 100,000 bpd, said Florian Thaler, strategist and chief executive at consultancy OilX.

Tests of crude oil in the Kazakh pipeline system carried out this week showed organic chloride content of 70-120 parts per million (ppm), which far exceeds a 6 ppm limit allowed in Russia and Kazakhstan.

Russian and Kazakh pipeline systems are linked, with Kazakhstan moving 15 million tonnes of oil a year via Russian ports.

Russia’s crude oil supplies to China via Kazakhstan remain unaffected.

Russian oil company Transneft (TRNF_p.MM) on Wednesday said that oil supplies to and from Kazakhstan are running as normal, the Interfax news agency reported.

CNPC Aktobemunaigas was Kazakhstan’s sixth-largest producer in 2018 with output of 4.9 million tonnes, about 4.3% of the country’s total production.

Reporting by Mariya Gordeyeva in Almaty and Alla Afanasyeva in Moscow; Additional reporting by Vladimir Soldatkin in Moscow; Writing by Olga Yagova and Olzhas Auyezov; Editing by Louise Heavens and David Goodman

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