January 29, 2020 / 11:11 AM / a month ago

Kazakhstan halts contaminated oil from spreading outside country

MOSCOW (Reuters) - Kazakhstan has contained the spread of contaminated oil within its borders by reducing exports to China and altering the schedule of supplies to domestic refineries, energy ministry and pipeline operator KazTransOil said on Wednesday.

Kazakhstan suspended its oil exports to China earlier this month after organic chlorides contamination was found in crude supplied by a Kazakh producer less than a year after the “dirty oil” crisis in neighboring Russia.

Unlike the Russian 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 and the volumes were much less, at around 150,000 tonnes.

KazTransOil told Reuters that organic chlorides content in oil at major pipelines, including the Russia-bound Atyrau - Samara pipeline, was within allowed levels.

Trading sources said Kazakhstan had also reduced its plans for oil transit via Russia by 100,000 tonnes in February.

On Tuesday, Kazakh Deputy Energy Minister Murat Zhurebekov said oil exports to China had not yet been restored. The authorities have also been working on plans for dirty oil utilization. It could be diluted by cleaner oil, shipped off by rail or sent to inventories, market sources said.

The contaminated oil crisis has also hit supplies to Kazakh domestic refineries. KazTransOil has reviewed shipment plans for the Shymkent and Pavlodar oil refineries, it said without providing any details on volumes.

Trading sources said the Shymkent refinery would slightly reduce its oil throughput to 395,000 tonnes this month from an initially planned 400,000 tonnes.

At the same time, Atyrau refinery will process extra 30,000 tonnes from the planned 486,200 tonnes.

Reporting by Alla Afanasyeva and Alexander Ershov; writing by Vladimir Soldatkin; editing by David Evans

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