China Development Bank recently signed a financing agreement with KazMunayGas and KMG PetroChem LLP for the construction of Kazakhstan's first long-distance pipelines for liquid ethane and propane, providing a loan of up to 2.89 billion yuan ($433 million)over a 15-year period.
The agreement is a concrete step by CDB to implement the outcomes of the Second China-Central Asia Summit. It is expected to help China and Kazakhstan leverage their respective strengths and deepen practical cooperation in the oil and gas sector.
The project will build two pipelines, each approximately 210 kilometers long, transporting ethane and propane extracted from associated gas at the Tengiz oil field to the National Industrial Petrochemical Technopark in the Atyrau Region.
The ethane pipeline will have an annual transport capacity of 1.6 million tons, supplying feedstock to the Silleno polyethylene project, which is under construction.
The propane pipeline will have an annual capacity of 1.1 million tons, ensuring feedstock supplies for the completed KPI polypropylene project.
The engineering, procurement and construction contract for the project was signed in November 2025. A consortium comprising Chinese companies, including China Petroleum Pipeline Engineering Co and CITIC Construction Co, is jointly undertaking the project. Construction officially began in October, with the pipelines scheduled to enter operation by the end of 2028. The project is expected to create around 1,300 local jobs during the construction period.
To support the project, CDB worked closely with its Kazakh partners to complete credit reviews and financing agreement negotiations efficiently. The financing was structured through a combination of export buyer's credit, yuan-denominated loans, coverage from China Export & Credit Insurance Corporation, and credit support from a sovereign wealth fund. The loan will be secured by a corporate guarantee from Samruk-Kazyna JSC.
CDB's support for the ethane and propane pipelines will help Kazakhstan turn its resource advantages into industrial development strengths, while facilitating the expansion overseas of Chinese equipment and engineering services. The project will further strengthen the foundation for full-chain cooperation between the two countries in the energy sector and inject fresh momentum into high-quality Belt and Road cooperation, head of CDB's international project department said.
