Kazakhstan will try new crude deliveries to Hungary through Russia’s Druzhba pipeline system in 2025, its energy ministry announced, after receiving Hungary’s foreign minister in Astana to discuss cooperation on oil and gas.
A meeting between Kazakh energy minister Almasadam Satkaliyev and Hungary’s foreign minister Peter Szijjarto Feb. 17 focused strongly on developing Kazakhstan’s Rozhkovskoye field, which state-owned KazMunaiGaz jointly operates with Hungarian refiner MOL and China’s FIOC, according to a statement from the Kazakh energy ministry.
With an expected output potential of 2.5 million cu m/d of gas production by 2027, the Rozhkovskoye field achieved first gas in Dec. 2023, and could deliver 500,000 mt/year of condensate at peak production.
In its statement, the Kazakh energy ministry said the field represented an important project for both countries but flagged the issue of oil export routes to Hungary as a key discussion point.
MOL, which still relies on Russian crude to run its Danube and Bratislava refineries, plans to make both sites capable of operating without Urals supply by 2026. However, so far, it has mostly focused on its Adria pipeline link to the Croatian coastline as a route to diversify its feedstock options.
As a comparable grade to medium sour Urals supply and often blended in the transit process, Kazakhstan Export Blend Crude Oil (KEBCO) presents an attractive ‘drop in’ feedstock option that can easily be integrated into its feedstock mix.
Kazakh outlets
Kazakhstan began delivering small crude volumes through the Druzhba pipeline system in Feb. 2023, using the northern branch of the network to supply Germany with an alternative to the Russian Urals supply it had cut off the previous month.
At around 1.2 million mt/year, however, Kazakh exports through the pipeline system have remained low and have yet to flow through the southern branch of the system to Russia’s remaining consumers in Hungary, Slovakia, and the Czech Republic.
Historically, Kazakhstan has relied on its Caspian Pipeline Consortium to export around 80% of its oil production, which it ships from the Russian Black Sea port of Novorossiisk, though it has expressed interest in utilizing other export routes, such as the Baku-Tbilisi-Ceyhan (BTC) pipeline, to mitigate environmental and security risks.
After a stretch of mostly avoiding any operational repercussions associated with the Russia-Ukraine war, a Feb. 17 drone attack on the CPC pipeline link exacerbated geopolitical insecurity over the connection, as damage to a pumping station has forced throughput reductions.
For now, however, Kazakhstan could be left with limited spare export capacity, having faced scrutiny for frequently exceeding its OPEC+ quota and vowed to submit new compensation plans after raising eyebrows over the expansion of its major Tengiz field.
