Kazakhstan's economy is largely based on its oil sector, as well as on extraction of coal and uranium, and other important raw materials. Kazakhstan is a major energy supplier to the EU and contributes towards the diversification of supply sources for the EU markets.
With over 70% of its oil exports going to the EU (6% of EU oil demand), Kazakhstan is already the EU’s third largest non-OPEC supplier, after Russia and Norway. Kazakhstan exports its gas to Russia, Ukraine and China.
Kazakhstan is also a member of the Energy Charter and pursues an active role in the currently on-going Energy Charter modernisation debate.
Since bilateral relations began, the European Union and Republic of Kazakhstan have developed a strong and mutually beneficial relation in the field of energy. Major EU-based energy companies have significant investments in the Kazakh oil and gas industry. On the other hand, Kazakh national oil and gas company KMG controls important EU-based assets for refining, trading and retail in South-Eastern Europe and countries of the Eastern Partnership.
Kazakhstan has very large reserves of uranium and ranks first in the world in terms of production and export of raw uranium. It is the single largest supplier to EU nuclear energy industry and meets more than 21% of the EU uranium demand. Kazakhstan’s oil and uranium exports are important to the European Union and make a positive contribution to the continent’s energy diversification.
EU – Kazakhstan energy cooperation framework
Kazakhstan’s increasing role in the EU energy landscape is supported by a well-developed legal and institutional framework of bilateral cooperation in the field of energy. The EPCA between the European Union and Kazakhstan, recognizes the need for enhanced, sustainable and effective cooperation in the field of energy, to ensure energy security, based on principles of mutual interest, reciprocity, transparency and predictability.
More practical aspects of the EU – Kazakhstan energy relations are addressed in the framework of the Memorandum of Understanding on Energy Cooperation, concluded in 2006, which covers topics such as:
- energy security and investment;
- increasing security of supply;
- predictability of demand;
- construction / upgrading transportation infrastructure of mutual interest;
- promotion of industrial cooperation (upstream and downstream).
There are also several co-operation agreements in the field of nuclear energy, on general aspects related to the peaceful use of this type of energy, but also addressing specific areas, such as nuclear safety and nuclear fusion.
Periodic meetings are organized between the EU and Kazakh officials, to discuss implementation of the respective agreements.
Participation of Kazakhstan in EU-sponsored energy-related programs and initiatives
EU has provided high-level political and significant financial support to the creation in Kazakhstan of the Low-Enriched Uranium Bank (LEUB), owned and controlled by the International Atomic Energy Agency, but operated by the Government of Kazakhstan, under its own legislation, in accordance with IAEA safety standards and security guidance. The bank is intended to assure countries with peaceful nuclear programs of a ready supply of LEU in case they cannot access it on the commercial market or otherwise.
The EU and Kazakhstan are partners in the Energy Charter. Treaty Kazakhstan also benefits from the EU4Energy programme of technical support for the creation of competitive energy markets, promotion of renewables and efficient use of energy.