Completed Mixed AidData Chinese Aid

CDB provides $607 million buyer's credit loan for Phase II of Shymkent Oil Refinery Reconstruction and Modernization Project (Linked to Record ID#72399)

$607K USD

Funder	China Development Bank (CDB)
Recipient Organization	Development Bank of Kazakhstan JSC (Baiterek or DBK)
Country	Kazakhstan
Start Date	Jun 09, 2017
End Date	Jan 09, 2031
Duration	4,962 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`53576`

Grant Description

CDB provides $607 million buyer's credit loan for Phase II of Shymkent Oil Refinery Reconstruction and Modernization Project On June 9, 2017, China Development Bank (CDB) signed a $607 million buyer's credit (facility) loan agreement with the Development Bank of Kazakhstan JSC (DBK) for Phase 2 of the Reconstruction and Modernization of the Shymkent Oil Refinery.

DBK then used the proceeds from the CDB loan to on-lend to a project company (special purpose vehicle) called PetroKazakhstan Oil Products LLP (PKOP).

The CDB loan facility had a maturity date of April 25, 2030 and carried an interest of rate of 2.7% per annum plus LIBOR. In September 2017 and December 2017, DBK drew down two tranches of $100 million each.

Then, in June 2018, DBK drew down a further $65 million, and in May 2020, DBK drew down a further $130 million tranche under the facility agreement.

The aggregate principal amount outstanding under the facility agreement was $0 as of June 30, 2017, $386 million as of December 31, 2020, and $368.1 million as of December 31, 2021 PKOP also contributed some of its own funds to support the implementation of the project.

Additionally, a Sinosure-backed bank syndicate of Calyon, Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, and Deutsche Bank provided additional financing to support the project.

The syndicate provided $225 million USD to DBK for on-lending, while Sinosure provided export buyer’s credit insurance.

The Export-Import Bank of China pledged $1 billion for the first phase of the modernization of the refinery as captured by linked Record ID#72399. The project sought to increase annual production from 5.25 million to 6 million tons and improve refining levels.

After the modernization (including Phase I, the plant was to be more environmentally friendly and able to produce Euro-4 and Euro-5 products.

The project also included the construction of a complex of catalytic cracking units with a capacity of 2 million tons a year, an alkali treatment unit, a amine recovery unit, a sour water stripper, a pressure swing absorption unit, a unsaturated LPG desulfurization unit, a saturated LPG desulfurization unit, a sulfur production unit, and a revamping of the CDU of LK-6U complex.

China Petroleum Engineering and Construction Corporation (CPEEC) was the general contractor responsible for project implementation. Phase II was completed on August 15, 2018.

📋 Staff Comments

The shareholders of PetroKazakhstan Oil Products LLP are CNPC Exploration and Development Company Ltd. (50%) and JSC Exploration & Production KazMunayGas (50%). CNPC Exploration and Development Company Ltd. is a subsidiary of PetroChina Company Ltd. and a 50/50 joint venture between PetroChina and CNODC. JSC Exploration & Production KazMunaiGas (EP KMG) is engaged in the production of crude oil at the oil fields in western and southern Kazakhstan, and it is a subsidiary of JSC National Company KazMunayGas.
The LIBOR rate was not specified, so the 6-month LIBOR is assumed. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
This project is also known as the PKOP LLP Project. The Chinese project title is 哈萨克斯坦奇姆肯特炼厂二期.
PKOP is a joint venture between KazMunaiGaz and CNPC, which was created in 2005.
The 2020 DBK Annual Report suggests that the maturity length of the loan is 10-years and the interest rate is 2.91%. This issue warrants further investigation.

📚 Sources & References

Shymkent Oil Refinery completes modernisation, improves fuel and environmental standards
PetroKazakhstan advances Shymkent refinery modernization
DBK: Shymkent oil refinery goes to the final stage of production modernization
China's CNPC completes upgrade at Kazakh's Shymkent refinery
The Shymkent Refinery is the model of successful partnership of two national operators KazMunayGas and CNPC.
Regarding PetroKazakhstan Oil Products LLP Shymkent Refinery Modernization and Revamping Project
Shareholders
PetroKazakhstan Oil Products LLP information
Annual Report 2017
十八年服务新中国对外开放新战略助力中国信保再启航
ANNUAL INFORMATION FORM FOR THE YEAR ENDED DECEMBER 31, 2003
Refining
哈萨克斯坦奇姆肯特炼厂二期改造工程开工成功
中石油工程建设公司向信用保险“借力”发展, 2017 Report on the Sustainable Development of Chinese Enterprises Overseas
International Cooperation
ANNUAL REPORT 2018
For access to our content, please go to https://www.euromoney.com/reprints
Investment Memorandum, 2020/09/30
IMPORTANT NOTICE
PROJECTS ON FINANCING
国家开发银行高度重视对哈合作开发性金融助力“一带一路”高质量发展
DEVELOPMENT BANK OF KAZAKHSTAN
Development Bank of Kazakhstan Base Prospectus 2017
Development Bank of Kazakhstan Drawdown Information Memorandum 2022
Development Bank of Kazakhstan Base Prospectus 2021
Development Bank of Kazakhstan Base Prospectus 2018
Supplement to Base Information Memorandum
Investment Memorandum, 2017/11/30
Investment Memorandum, 2019/04/30
Investment Memorandum, 2020/04/30
Base Information Memorandum - JSC Development Bank of Kazakhstan U.S.$3,000,000,000 MEDIUM TERM NOTE PROGRAMME Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.