Temirlan-Oil Refinery Project

Overview & Market Background

The Kyrgyz Republic has been experiencing a prolonged shortage of refined petroleum products. Following the general economic downturn and specifically in the oil sector, this Central Asian country entered the new millennium demonstrating stable growth in demand for petroleum products (about 10% per year). However, the complexity arises because the growing demand is not matched by an equivalent increase in supply.

Over the past 15 years, several new refineries have been built in the Kyrgyz Republic, but there have been no qualitative changes in the market. Despite these additions, the situation remains tight.

Main Problem

All Kyrgyz refineries are located far from crude oil production sites and pipeline routes, and the Kyrgyz Republic's own extractable oil reserves are minimal—insufficient to meet the continuously growing demand. The total refining capacity of the country far exceeds the actual output. The five active Kyrgyz refineries—"Junda" (800,000 t/yr), Tokmok (450,000 t/yr), Kant (300,000 t/yr), "Kyrgyz Petroleum" (300,000 t/yr), and Jalal-Abad (60,000 t/yr)—have a combined capacity nearly 15 times larger than their current production. This mismatch is primarily because of the distances from crude sources and pipeline infrastructure.

Even the existing production capacities do not meet modern standards. Refining depth and product quality are concerning. As the Kyrgyz Republic expanded its nominal refining capacity, the proportion of gasoline and diesel output declined. In 2000, gasoline accounted for over half of total output; currently, about 54% is heavy fuel oil (mazut).

Consequently, the Kyrgyz Republic faces a severe deficit in fuel and lubricants, despite having several refineries. All existing facilities operate below 10% capacity because they lack direct pipeline connections for crude supply and must rely on rail, artificially increasing both raw material and final product costs.

Statistical Charts (2000–2017)

Below are two charts showing crude oil production & imports, alongside petroleum product production & imports in the Kyrgyz Republic from 2000 to 2017.

Source: National Statistical Committee of the Kyrgyz Republic.

Chart 1 - Crude Oil Production and Import (2000-2017)

Chart 2 - Petroleum Products Production and Import (2000-2017)

Project Financing Framework

A credit agreement has been signed in connection with the project.

Formation of the Kazakh–Kyrgyz Commission & the “Maymak” FEZ

A Kazakh–Kyrgyz intergovernmental commission was established to support cross-border industrial cooperation, with Mr. M. D. Orazbayev (General Director of Temirlan-Oil) as one of the key initiators. This institutional work contributed to the project framework and to the creation of the “Maymak” Free Economic Zone (FEZ) in Kara-Buura District of Talas Region.

By a government decree of the Kyrgyz Republic, Temirlan-Oil was tasked with developing the “Maymak” FEZ, allocating specific areas for an oil refinery, a petrochemical plant, a gold mining enterprise, and an agro-industrial complex.

As part of the first phase of the “Maymak” FEZ development plan—constructing the oil refinery—Temirlan-Oil completed all required architectural and planning documentation with the relevant government agencies, built an oil storage facility on the designated land, established the necessary infrastructure, and carried out earthworks up to the main pipeline tie-in point.

Temirlan-Oil also reached agreements with the German government to participate in the “Maymak” FEZ project via a local manufacturer financing program. Under these agreements, German manufacturers are designated as primary equipment suppliers for all development phases of the FEZ, while Euler Hermes Germany is the lead project finance arranger and risk insurer. The group's German office, "Temirlan Development GmbH", supports international coordination of the project financing program.

Feedstock & Logistics Concept

The project is designed to assess regional crude-feedstock options and the logistics required for refinery operations. Potential sources and transport solutions are reviewed within the project’s technical and contractual workstreams.

Source identities, volumes, routes, quality parameters and commercial terms are transaction-specific and are not presented here as confirmed public arrangements.

Offtake & Domestic Market

Temirlan-Oil's commercial activities may include the sale of diesel fuel and other petroleum products, subject to product availability, applicable approvals and separate transaction-specific agreements. This website does not represent continuous availability or guaranteed supply.

The Kyrgyz Republic currently has several refineries for processing hydrocarbons into fuel. These include LLC "Kyrgyz Petroleum Company" in Jalal-Abad (300 thousand t/yr), "Russneft" at the refinery in Kant (250 thousand t/yr), and LLC "China Petrol Company Junda" in Kara-Balta (800 thousand t/yr nominal, ~80 thousand t/yr actual). All of them lack reliable crude supply and operate below capacity. Petroleum products (fuel) are therefore imported from Kazakhstan and Russia. In 2014, the Kyrgyz Republic's domestic annual demand was about 3.5 million tons of light petroleum products and 650 thousand tons of heavy petroleum products.

Insurance & Project Implementation

Insurance and risk-management solutions for the project are structured with the involvement of leading international insurance providers. Highly professional specialists and technologists from Russia, Kazakhstan, and Germany have been engaged in project design and implementation.

Under the agreement, the Kyrgyzgiprostroy Design Institute, an open joint-stock company in the Kyrgyz Republic, will act as the general designer. Subcontracting work will be carried out by international engineering companies. The supply and turnkey installation of technological equipment is expected to involve German manufacturers and specialized engineering partners.

German equipment was selected because the technology can be reconfigured for any feedstock parameters across a broad spectrum, as well as adapted to produce various final products. Hence, the refinery can be supplied from multiple crude sources. In case of unforeseen circumstances, complete logistics for the supply of alternative feedstock have been developed for the plant. The necessary infrastructure to accommodate rail deliveries is already in place.

Project Technical & Financial Details

Company Name	Open Joint-Stock Company "Trading and Industrial Company 'Temirlan-Oil'"
Date of Re-registration	May 12, 1998
Type of Company	Open Joint-Stock Company
Industry	Oil Refining
Projected Capacity	3,500,000 tonnes per year (~9,589 tonnes/day, 70,000 BPD)
Minimum Load	1,500,000 tonnes per year (~4,110 tonnes/day, 30,000 BPD)
Own Contribution	US$6,700,000 (six million seven hundred thousand US dollars)
Founders / Shareholders	M. D. Orazbayev – 100%
Total Estimated Cost	686,509,440.8 EUR (including everything listed below)
Cost of Delivery & Equipment Installation	499,313,100.0 USD
Oil Infrastructure Facilities	115,889,523.0 USD
Contingency Costs	32,690,925.8 USD (5%)
Connection to Trunk Lines	22,500,000 USD
Pipeline Construction	14,790,000 USD (17 km)
Cost of Design & Cost-Estimate Documentation	325,892 USD
Payback Period	Approximately 5 years
Equipment Supplier & Turnkey Installation	German equipment and engineering partners Duration: 12–18 months
Equipment Requirements	Must allow the processing of any crude grade, enabling feedstock from multiple sources
Planned Staff	124 employees
Crude Oil Quality	Defined in project-specific technical documentation and subject to representative assay review.
Planned Products & Services	The planned product slate may include gasoline, diesel, kerosene and aviation fuel, fuel oil, bitumen and LPG, subject to the final process configuration.
Indicative Product Slate	The product mix remains subject to updated engineering, process configuration and approved project documentation. No public production or sales allocation is stated.
Profitability of Investment	35.87%
Profitability of Capital	283.79%
IRR	21.7%
Commercial Approach	Domestic and selected regional opportunities may be considered under separate agreements.
Target Markets	The Kyrgyz Republic and potential regional markets, subject to commercial and regulatory review.
Offtake Status	Transaction-specific counterparties and terms are communicated separately through authorized channels.
Feedstock Status	Potential sources, volumes and delivery terms are addressed in project-specific technical and contractual documentation.
Competitors (Local & Regional)	Kyrgyz Petroleum Company (Jalal-Abad, Kyrgyz Republic) — capacity 300 thousand t/yr "RussNeft" (Kant, Kyrgyz Republic) — capacity 250 thousand t/yr Shymkent Oil Refinery (Shymkent, Kazakhstan) — capacity 4 million t/yr
Insurance	International risk insurance arrangements
Technologies & Providers	German engineering and equipment manufacturing companies

Geolocation: “Maymak” FEZ

The marker sits on the company’s administrative building at the project site in the “Maymak” Free Economic Zone. It marks the location, not a surveyed site boundary.

Project site · “Maymak” FEZ · Talas Region · Kyrgyz Republic

42.722818° N · 71.273877° E