LPG increase thanks to car conversions in Kazakhstan

The consumption of LPG for increased by 43% last year in Kazakhstan, mainly because of an increase in auto gas conversions, according to a new report.

Sales of gasoline, however, dipped by 5% in 2016.

Gazcentre Manager Varvara Gutchenko, in an interview with The Astana Times, said: “As of today, LPG is 2.5 times cheaper than low-octane gasoline and three times cheaper than high-octane gasoline.

“Up-to-date LPG equipment sufficiently increases engine life, decreases engine oil pollution and the converted car has two fuel tanks, which means that its trip distance doubles. We can talk about the increase in demand for our services from one year to the next.”

The number of LPG filling stations in the country year increased by 51% in one year, as driver demand for gasoline fell in response to a sharp increase in prices in the last 12 months after the government refused to control fuel prices.

In 2016, the average price of the most popular type of gasoline increased by 13 percent compared to 2015.

In 2016, LPG sales reached 457,800 tonnes and 28.9bn tenge (US$89m), approximately two times the 2015

Meanwhile, Sumatec Resources Bhd said it will not be going through with its proposed plan to take control of the Rakushechnoye oil and gas (O&G) field in Kazakhstan via the acquisition of CaspiOilGas LLP (COG), which it announced last year.

It announced last July that it would be acquiring Markmore Energy (Labuan) Ltd (MELL), the parent company of COG, for US$205m. The deal would have given Sumatec ownership of MELL’s O&G reserves at Rakushechnoye, the concession of which belongs to COG.

However it is planning on building an LPG plant in the same location. The proposed LPG production is intended to provide Sumatec with a new source of income and allow for the monetisation of the gas produced at the Rakushechnoye field.

The LPG plant, to be located within the O&G field, will be funded by Sumatec for an estimated US$95m (£73m). It is scheduled to be operational in two years and the company hopes to start work on the plant by September.