Reference
Drafted by the Russian Ministry of Energy on the Government’s instructions, the directive lays down the terms and conditions for the transit of oil by the state-run petroleum company Rosneft through Kazakhstan into China. The amounts to be transported shall total 7 million metric tonnes per year (with a possible subsequent increase to 10 million tonnes).
The document provides Rosneft with access to a network of backbone pipelines linking Omsk (in the Russian Federation) with Priirtyshsk (in the Republic of Kazakhstan), Atasu (Kazakhstan), and Alashankou (in China).
The transit of oil shall take place in line with an agreement signed between Rosneft and the Kazakh pipeline operator KazTransOil. The fees to be charged for the service shall be established by Kazakhstan’s Ministry of Oil and Gas for the entire period of the agreement’s validity (until 1 January 2019), with no possibility of interim modification.
Transit services along the designated route or any of its sections will be VAT-taxed by the Kazakh side at a zero rate.
In order to provide Kazakhstan’s refineries with raw material, KazTransOil is entitled to independently replace Russian crude oil with Kazakh crude within Kazakhstan’s backbone pipeline network, on condition that Rosneft compensates at the terminus (Alashankou), with the amounts and quality conforming to the agreement.
The customs duty on oil exports to be sent by Rosneft via Kazakhstan beyond the Customs Union’s borders, in line with the agreement, shall be paid into the Russian Treasury. Also, Rosneft shall be exempted from any transportation-related taxes and customs duties payable into the Republic of Kazakhstan’s treasury coffers.
