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China, Kazakhstan to ink deals worth $10bn during Li’s trip
December 14, 2014, 5:40 am

File photo of Trains linking Korgas Pass of China and Sary-Ozek railway of Kazakhstan, the second crossborder rail line that links China's Xinjiang region and Kazakhstan, in Korgas [Xinhua]

File photo of Trains linking Korgas Pass of China and Sary-Ozek railway of Kazakhstan, the second crossborder rail line that links China’s Xinjiang region and Kazakhstan, in Korgas [Xinhua]

China and Kazakhstan are expected to sign about 30 cooperative agreements worth $10 billion during a two-day trip of Chinese Premier Li Keqiang that begins on Sunday.

With a population of 17 million, Kazakhstan is Central Asia’s largest economy and is the second-largest post-Soviet oil producer after Russia.

Bilateral trade between China and Kazakhstan “is increasing annually by 20 per cent” said Li. Kazakhstan signed on as one of 21 founding members of the new China-led Asia Infrastructure Investment Bank (AIIB) launched in October this year.

During his visit the Chinese Premier will meet Kazakh President Nursultan Nazarbayev where the two sides will discuss boosting trade and investment and the revival project of Chinese President Xi Jinping – the Silk Road Economic Belt.

“Over 2,000 years ago, the two countries were linked by the ancient Silk Road, and now the Silk Road Economic Belt initiative enjoys profound historic connotation,” Li said ahead of his arrival in Kazakhstan.

Meanwhile, in the wake of Western sanctions against Russia, a major transit route of Kazakh crude to world markets, Kazakhstan is looking to expand oil exports to giant and energy-hungry neighbor China.

Kazakhstan holds 3 per cent of global recoverable oil reserves and produced 81.7 million tones of oil in 2013.

Kazakhstan’s Senate ratified an agreement in June this year between the Central Asian nation and Russia on cooperation in transporting Russian oil to China.

Under the agreement, Kazakhstan agreed to provide long-term access to pipelines linking the three countries for the transport of 7-10 million tons of oil per year.

It is free to replace Russian oil with Kazakh oil, provided it is of the same quantity and quality specified in the contract with China.

Both Kazakhstan and Russia are seeking alternative routes for their oil exports in the face of tougher new round of sanctions against Moscow over the Ukraine crisis.

Kazakhstan has become China’s second largest trade partner in the Commonwealth of the Independent States and its first investment destination in Eurasia, while China is the second largest trade partner and the largest export market of Kazakhstan.

The two nations have already established a joint-venture logistics base and are looking to enhance inter-connectivity with highways, railways, ports, air routes, and oil and gas pipelines.

Kazakhstan is also a member of the regional security bloc, the China-Russia-led SCO (Shanghai Cooperation Organisation).

The Chinese Premier will also attend the 13th prime ministers’ meeting of the Shanghai Cooperation Organization (SCO) in the Kazakh capital of Astana.

The SCO, founded in 2001, currently has six member states — China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan. It also has Afghanistan, India, Iran, Mongolia and Pakistan as observers. Belarus, Turkey and Sri Lanka are dialogue partners of the bloc.

 

TBP and Agencies

One Response to China, Kazakhstan to ink deals worth $10bn during Li’s trip

  1. sophktt Reply

    February 27, 2015 at 9:17 am

    The development plan for the $136bn project, approved in February 2004, foresees production developing in three phases for proven reserves of about 13 billion barrels.

    The field initially produced 60,000bpd and is expected to produce 1.5 million barrels per day by 2021, which is – slightly more than Kazakhstan’s total current production.

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