OREANDA-NEWS. June 13, 2014. Draft law "On ratification of the Agreement between the Government of Kazakhstan and the Government of the Russian Federation on cooperation in the field of Russian oil transportation through the territory of the Republic of Kazakhstan to China" was approved at the plenary session of the Majilis.

"The main purpose of the agreement is creation of conditions for transportation of Russian oil through the territory of the Republic of Kazakhstan to China," Minister of Oil and Gas Uzakbai Karabalin said presenting the bill.

Minister noted that the agreement specifies the conditions for long-term Russian oil transportation by authorized organization of the Russian side in the amount of 7 million tons per year, with a possible increase to 10 million tons per year. The document also provides access to the system of pipelines towards Omsk-Priirtyshsk-Atasu-Alashankou.

The Agreement also provides that the Kazakh side imposes oil transportation services to value added tax at a zero rate.

The cost of transportation is approved for duration of agreement by the authorized body of Kazakhstan in U.S. dollars per ton on the basis of agreements by authorized organizations of sides.

To ensure oil refineries, the Kazakh side is free to replace in pipelines the Russian oil with Kazakhstan one, subject to transfer of authorized organization of the Russian side at the final destination of oil in that quantity and quality provided by the contract of transportation.

Agreement was delivered in Moscow on 24 December 2013.