China and Central Asia Continue to Deepen Cooperation in Energy and Chemical Sectors

Multiple major projects signed at second summit

From June 16 to 18, the second China-Central Asia Five Nations Summit was held in Astana, Kazakhstan. During the summit, China reached a series of cooperation agreements with the five Central Asian countries, signed multiple cooperation documents, and proposed various initiatives and measures, further expanding the influence of the China-Central Asia cooperation mechanism. Notably, several major projects in the energy and chemical sectors were agreed upon, marking a new phase of high-quality development in energy and chemical cooperation between China and Central Asian nations.

A long-standing blueprint

Driven by cooperation under the Belt and Road Initiative (BRI), tangible and substantial achievements have been made in connectivity between China and Central Asian countries.

Kazakhstan, located at the heart of Central Asia, has become an attractive destination for foreign investment due to its rapid economic growth, stable political environment, and sound social order. Over the years, deepening bilateral relations, combined with its abundant natural resources and strategic location, have drawn significant attention and investment from Chinese enterprises such as CNPC and Sinopec.

The Atirau Refinery EPC project in Kazakhstan, undertaken by Sinopec, is one of the key projects under Kazakhstan’s industrial strategic development plan. It has also driven over $600 million worth of exports of complete sets of Chinese equipment and materials, establishing a new national "calling card" for China's refining and petrochemical technology. In 2022, the integrated petrochemical project—the largest chemical project in Kazakhstan—undertaken by China National Chemical Engineering Group, commenced operations. As Kazakhstan’s first polyolefin project, it provides crucial support for upgrading the nation’s petrochemical industry.

Turkmenistan holds the world’s fourth-largest natural gas reserves, and its oil and gas sector is a vital pillar of the economy. Turkmenistan supplies natural gas to China via the China-Central Asia Gas Pipeline, having delivered more than 300 billion cubic meters cumulatively by 2023.

In Kyrgyzstan, in December 2022, Dongguang Chemical Co., Ltd. of Hebei invested $260 million to build and operate the Kyrgyz National Fertilizer Plant, which will produce 500,000 tons annually of humic acid, urea, and compound fertilizers. This project, launched under the BRI framework, will significantly improve soil and ecological conditions, promote agricultural development, and boost grain production in Kyrgyzstan.

Industrial upgrading and strengthening supply chains

China and Central Asian countries are deepening capacity cooperation, filling industrial gaps.

According to Kazinform, on June 16, Kairmankhan Iskakzhiyev, First Deputy Chairman of the Management Committee of Kazakhstan’s national oil and gas company, met with Zhao Quanmin, General Manager of Sinopec Kazakhstan, to discuss prospects for collaboration in geological exploration and other fields. Following the meeting, KazMunayGas and Sinopec signed a joint activities and financing agreement for the Berekovskoye project in West Kazakhstan. The document formalized a strategic partnership and outlined terms for joint implementation. Both parties agreed to proceed on a 50/50 basis, with Sinopec fully funding the exploration phase. On June 6, Zhongman Petroleum announced plans to heavily invest in several key oilfield projects, one of which is located in Kazakhstan. With total investment exceeding $500 million, this marks another step forward in Zhongman’s internationalization strategy, reflecting its ambition and global positioning in the oil and gas sector.

International Real Estate operates the Tokmok Refinery in Kyrgyzstan (annual capacity of 400,000 tons), producing refined oil products and expanding exports to other Central Asian countries. As a benchmark project for Xinjiang-based energy companies going global, it benefits from the development of Central Asian energy corridors and preferential customs policies within free trade zones.

Deepening openness and mutual benefit

As China actively seeks broader growth opportunities and added value in the energy sector, Central Asian countries are also enhancing cooperation through increasingly pragmatic measures.

At the beginning of this year, during his visit to China, Kyrgyz Minister of Energy Talaibek Ibraev held talks with representatives from ten major Chinese energy companies to explore cooperation opportunities in the energy sector. Kyrgyzstan aims to accelerate its energy transition through these discussions, while Chinese companies are leveraging the opportunity to deepen their presence in the Central Asian market and extend renewable energy industrial chains.

During the recent China-Central Asia Summit, China and the five Central Asian nations reached a series of cooperation agreements and signed documents including: the Framework Agreement between CNPC, the Ministry of Energy of Kazakhstan, and KazMunayGas on the expansion of the Shymkent Refinery to 12 million tons per year; the Framework Agreement between CNPC, the Ministry of Energy of Kazakhstan, KazMunayGas, and Aktobe Region on establishing a joint venture for the construction of an Aktobe gas-to-urea plant; the Tripartite Agreement between CNPC, the Ministry of Energy of Kazakhstan, and Kazakhstan’s national gas company on supporting cooperation in Block North-1 and deepening oil and gas collaboration; and the Exchange of Letters between the Government of the People's Republic of China and the Cabinet of Ministers of the Kyrgyz Republic on the Project for Providing Agricultural Machinery Equipment to the Ministry of Agriculture of Kyrgyzstan. These agreements lay a stronger foundation for future high-quality development.

Central Asia is where the Belt and Road Initiative was first proposed, and Central Asian countries are active participants in the initiative. Going forward, as a series of practical measures are implemented and numerous energy projects come to fruition, China-Central Asia cooperation will steadily reach new heights, injecting strong momentum into building a closer China-Central Asia community with a shared future.