Overview & Market Background
Kyrgyzstan has been experiencing a prolonged shortage of refined petroleum products. Following the general economic downturn and specifically in the oil sector, this Central Asian country entered the new millennium demonstrating stable growth in demand for petroleum products (about 10% per year). However, the complexity arises because the growing demand is not matched by an equivalent increase in supply.
Over the past 15 years, several new refineries have been built in Kyrgyzstan, but there have been no qualitative changes in the market. Despite these additions, the situation remains tight.
Main Problem
All Kyrgyz refineries are located far from crude oil production sites and pipeline routes, and Kyrgyzstan’s own extractable oil reserves are minimal—insufficient to meet the continuously growing demand. The total refining capacity of the country far exceeds the actual output. The five active Kyrgyz refineries— "Junda" (800,000 t/yr), Tokmok (450,000 t/yr), Kant (300,000 t/yr), "Kyrgyz Petroleum" (300,000 t/yr), and Jalal-Abad (60,000 t/yr)—have a combined capacity nearly 15 times larger than their current production. This mismatch is primarily because of the distances from crude sources and pipeline infrastructure.
Even the existing production capacities do not meet modern standards. Refining depth and product quality are concerning. As Kyrgyzstan expanded its nominal refining capacity, the proportion of gasoline and diesel output declined. In 2000, gasoline accounted for over half of total output; currently, about 54% is heavy fuel oil (mazut).
Consequently, the Kyrgyz Republic faces a severe deficit in fuel and lubricants, despite having several refineries. All existing facilities, as noted, are operating below 10% capacity because they lack direct pipeline connections for crude supply and must rely on rail, artificially increasing both raw material and final product costs.
Statistical Charts (2000–2017)
Below are two charts showing crude oil production & imports, alongside petroleum product production & imports in Kyrgyzstan from 2000 to 2017.
Source: National Statistical Committee of the Kyrgyz Republic.
Formation of the Kazakh–Kyrgyz Commission & FEZ "Maimak"
To solve the crisis, a Kazakh–Kyrgyz intergovernmental commission was established, with Mr. M. D. Orazbayev (CEO of JSC "TIC Temirlan-Oil") as one of the key initiators. Based on this commission’s work, a quota of 5 million tons of crude from Kazakhstan to Kyrgyzstan was approved. Additionally, a connection point to a major pipeline was identified, and the "Maimak" Free Economic Zone (FEZ) was created in Kara-Burin District of Talas Region, on the border between Kazakhstan and Kyrgyzstan.
By a governmental decree of the Kyrgyz Republic, JSC "TIC Temirlan-Oil" was tasked with developing the "Maimak" FEZ, allocating specific areas for an oil refinery, a petrochemical plant, a gold mining enterprise, and an agro-industrial complex.
As part of the first phase of the "Maimak" FEZ development plan—constructing the oil refinery—JSC "Temirlan-Oil" prepared and finalized all required architectural-planning documentation in state agencies, built an oil storage facility on the designated land, set up the necessary infrastructure, and carried out earthworks up to the main pipeline tie-in point.
JSC "Temirlan-Oil" also reached agreements with the German Government to participate in the "Maimak" FEZ project via a local manufacturer financing program. Under these agreements, German manufacturers are designated as primary equipment suppliers for all development phases of the FEZ, while Euler Hermes Germany is the main project finance organizer and risk insurer. At the request of the German side, JSC "Temirlan-Oil" established a subsidiary in Germany, "Temirlan Development GmbH", to implement the project financing program.
Pipeline & Supply Scheme
The Temirlan-Oil refinery is planned to be supplied with Brent crude from the Kumkol petroleum basin in Kyzylorda and South-Kazakhstan regions of the Republic of Kazakhstan (with potential substitution of Russian and Iranian crude*) via a pipeline running from Shymkent through Taraz (Kazakhstan). It is laid in the corridor of state-expropriated land for the construction of the Beineu–Khorgos main gas pipeline passing through Zhambyl Region. The construction of the Shymkent–Taraz– "Maimak" FEZ oil pipeline and its connection to the Shymkent–Atasu trunk line has been coordinated with the Ministry of Fuel & Energy of Kazakhstan and JSC "KazTransOil".
*According to the developed substitution scheme, Russian West Siberian light crude will be purchased via LLP "TLC oil market" (Kazakhstan) at a domestic price and supplied by pipeline through Pavlodar to DAP Atasu, where Russian oil will be substituted by Kumkol producers for Brent crude (delivered FCA Tekesu station, Shymkent). This reduces export costs for Kumkol producers and preserves quality. A similar scheme applies to Iranian light crude: imported on FOB Aktau terms at discounts from "Platts", then swapped at JSC NC "KazMunayGas" for FCA Tekesu deliveries. Iranian light crude helps JSC NC "KazMunayGas" (and its subsidiary JSC "KazTransOil") improve the quality and flow properties of Mangyshlak blend, reducing pipeline transport costs to the Atyrau Refinery and increasing refined product yields. JSC NC "KazMunayGas" is an attractive substitution partner because it holds stakes in Kumkol production, owns 50% of the "ShymkentNefteOrgSintez" refinery, and has a rail-loading terminal at Tekesu station.
Offtake & Domestic Market
The sale of final products is governed by preliminary agreements with suppliers and buyers, and under a contract with the Kyrgyz Government. The planned distribution is as follows:
- Within the Kyrgyz Republic: 30% of total production (with a readiness to purchase up to 65% if needed).
- For export: 70% of total production volume.
Kyrgyzstan currently hosts several refineries for processing hydrocarbons into fuel. These include LLC "Kyrgyz Petroleum Company" in Jalal-Abad (300 thousand t/yr), "Russneft" at the refinery in Kant (250 thousand t/yr), and LLC "China Petrol Company Junda" in Kara-Balta (800 thousand t/yr nominal, ~80 thousand t/yr actual). All of them lack reliable crude supply and operate below capacity. Petroleum products (fuel) are therefore imported from Kazakhstan and Russia. In 2014, Kyrgyzstan’s domestic annual demand was about 3.5 million tons of light petroleum products and 650 thousand tons of heavy petroleum products.
Insurance & Project Implementation
All risk insurance is provided by AIG Lloyd under the existing agreement. Highly professional specialists and technologists from Russia, Kazakhstan, and Germany have been engaged in project design and implementation.
According to the agreement, JSC "KyrgyzGiproStroy" (Kyrgyzstan) will act as the general designer. Subcontracting work will be carried out by the engineering firm "TS Consult" (Germany) and ASCON Group GmbH (Germany). The supply and turnkey installation of technological equipment is entrusted to ASCON Group GmbH (Germany), together with CTA Anlagenbau GmbH and OTEC Group (Germany).
German equipment was selected because the technology can be reconfigured for any feedstock parameters across a broad spectrum, as well as adapted to produce various final products. Hence, the refinery can be supplied from multiple crude sources. If unforeseen circumstances arise, the plant can be switched to receiving Russian or Iranian crude via rail. The necessary infrastructure to accommodate rail deliveries is already in place.
Project Technical & Financial Details
| Company Name | JSC Trading & Industrial Company "Temirlan-Oil" |
|---|---|
| Date of Foundation | May 12, 1998 |
| Type of Company | Open Joint Stock Company |
| Industry | Oil Refining |
| Projected Capacity | 3,000,000 tons per year (~8,333 tons/day, 60,000 BPD) |
| Minimum Load | 1,500,000 tons per year (~4,110 tons/day, 30,000 BPD) |
| Own Contribution | US$6,000,000 (six million US dollars) |
| Founders / Shareholders | M. D. Orazbayev – 100% |
| Total Estimated Cost | 686,509,440.8 EUR (including everything listed below) |
| Cost of Delivery & Equipment Installation | 499,313,100.0 USD |
| Oil Infrastructure Objects | 115,889,523.0 USD |
| Unforeseen & Off-the-book Costs | 32,690,925.8 USD (5%) |
| Connection to Trunk Lines | 22,500,000 USD |
| Pipeline Construction | 14,790,000 USD (17 km) |
| Cost of Design & Estimate Documentation | 325,892 USD |
| Payback Period | 4–5 years |
| Equipment Supplier & Turnkey Installation | ASCON Group GmbH (Germany), CTA Anlagenbau GmbH, OTEC Group (Germany), TS Consult (Germany) Duration: 12–18 months |
| Equipment Requirements | Must allow refining of any crude grades, enabling feedstock from multiple sources |
| Planned Staff | 124 employees |
| Crude Oil Quality | Brent-type crude from Kumkol producers (quality certificates available) |
| Planned Products & Services | Production of Euro-4/Euro-5 gasoline, diesel, kerosene, jet fuel, mazut, heating oil, bitumen, LPG (propane-butane); also toll refining of third-party crude |
| Product Yields at Min. Load (1.5 million t/yr) |
|
| Profitability of Investment | 35.87% |
| Profitability of Capital | 283.79% |
| IRR | ~63.00% |
| Sales (Export vs. Domestic) | 70% export, 30% domestic (up to 65% if needed) |
| Export Markets | Afghanistan, Tajikistan, etc. |
| Buyers | Export: "AL JAWAD Trading Est" (UAE), NC "Tajik Petroleum" (Tajikistan) Domestic: SP "Munay Myrza" (Kyrgyzstan), SP "Kirsel" (Kyrgyzstan) |
| Main Crude Suppliers |
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| Competitors (Local & Regional) |
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| Insurance | AIG Lloyd |
| Technologies & Providers | ASCON Group GmbH (Germany), CTA Anlagenbau GmbH, OTEC Group (Germany), TS Consult (Germany) |
Geolocation: "Maimak" FEZ
This map shows the planned location of the refinery within the "Maimak" Free Economic Zone, near the Kazakh–Kyrgyz border. You can zoom in and out freely.
Project Documents
Explanatory Note (PDF)
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Refinery Teaser (PDF)
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Additional Analysis: Crawford Report (PDF)
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Existing Facilities Photo Gallery
These photos represent the existing facilities built so far under the refinery project.
