Yesterday, at the plenary session of the Senate of RoK Parliament chaired by Kairat Mami, the Chamber ratified two international agreements. 
According to the agenda, the deputies considered and ratified the Agreement between the Governments of RoK and PRC concerning certain issues of cooperation in the development and operation of Kazakhstan-China pipeline.

As the Minister of Oil and Gas Uzakbai Karabalin noted introducing the draft law, the agreement defines the mechanisms and conditions for implementing the project for the development of the operation of the Kazakhstan – China oil pipeline, in order to increase the throughput capacity. At the same time, capital investments are expected to comprise total KZT 126 billion.

According to the Minister, the main purpose of the agreement is to establish a single network tariff for transportation of Kazakh oil through the Kazakhstan – China pipeline, regardless of the point where oil enters the pipeline system, the tariff is established without taking into account the length of the oil transportation route.

– In this case, the tariff for the supply of oil to the domestic market will be approved by the authorized state bodies of Kazakhstan in accordance with the laws of the Republic and shall not exceed the export tariff – U. Karabalin explained.
He added that the level of prices for contracts for the sale of oil will be determined on the basis of international oil quotations measured in barrels and will be single on the border between Kazakhstan and China.

When discussing the document, the Deputies showed interest in issues related to increased presence of foreign investors in the country’s oil and gas sector. Answering these questions, the Minister of Oil and Gas informed the senators that the share of Chinese investments now stands at 24%, but in the future, according to forecasts of his department, it will drop to 7-8%.

The Minister of Oil and Gas told how long this agreement is expected to stay in effect when asked by the Senator Mr. Erlan Nigmatulin why in the document meant for 35 years (until 2048) economic calculations were made only up to 2025. The Senator also asked whether any loss of the state budget is expected in connection with the transportation of Russian oil without charging any fees, which is allowed by Article 8 of the agreement.

Answering the first question of E. Nigmatulin, Mr. Karabalin explained that calculations were made up to 2025 because this period is the most critical for the return of funds which are going to be invested to this pipeline, that is why calculations were made up to this watershed.
– In future, when the investments are returned, the risks will depend on operating activities carried out by our KazTransOil company, – Karabalin said.

As for transit fees, the Minister of Oil and Gas informed the deputies that the agreement is valid on the basis of the agreement which was ratified in 2004, it already contains provisions regulating the tariff policy for this pipeline, according to which no payment will be charged for transit.

In addition, there is Article 7 of the Treaty to the 1994 Energy Charter ratified by the Presidential Decree, which states that each of the contracting parties shall take the necessary measures to ensure the transit of energy materials and products in accordance with the principles of free transit, making no differences as to the origin of such energy materials and products, without discriminating tariffs. There is also a clause according to which each Contracting Party shall accord to goods that were in transit through the territory of any other contracting party the treatment no less favorable than that which would be provided to such goods if they were transported from the place of origin to their destination without going through the territory of the other contracting party. And presently, no state duties are charged for transit of Russian oil through Kazakhstan.

– Thus, the wording of Article 8 corresponds to the current situation and does not lead to negative consequences, – U. Karabalin noted.
Also during the meeting the deputies ratified the Treaty of the CIS member states concerning international search for wanted persons. The purpose of the agreement is to create a legal framework for the cooperation of CIS member states in international search for wanted individuals. According to the document, organization of the international search for wanted persons shall be carried out by means of queries provided for by this agreement, and by other requests to be forwarded by competent authorities of the requesting Party to the competent authorities of the requested party.
Moreover, the senators approved proposals for delegating the deputies of the Senate of the Parliament of the Republic of Kazakhstan to international parliament organizations and regional groups for cooperation of the Senate of the Parliament with parliaments of foreign states.


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