Kazakhstan’s KMG plans to expand Aframax fleet from 2 vessels to 12

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Kazakh state-owned oil and gas company KazMunaiGaz (KMG) has announced that it is planning to expand its fleet of Aframax tankers from two to 12 over the next few years, according to a interview published on the company’s press center.

“We have the interest and desire to expand our Aframax fleet,” said KMG Management Board Chairman Magzum Myrzagaliev. “This will be a complicated and lengthy process, as we would need to order them and look for them on the market. This is something we are doing right now.”

KMG currently has a fleet of seven oil tankers, according to the statement — two 115,000 dwt Aframaxes (the Alatau and Altai), three smaller 12,000 dwt vessels (the Astana, the Almaty and the Aktau) and two 8,000 dwt vessels (the Taraz and the Liwa) which it owns jointly with Abu Dhabi Ports Group (ADP).

Expanding the fleet to 12 Aframax tankers would allow KMG to transport half of the oil produced from the Tengiz oil field, located along the northeast shores of the Caspian Sea, Myrzagaliev added.

According to Myrzagaliev, historically only Chevron Tankers Ltd. would transport the Kazakh CPC grade from the Russian port of Novorossiisk, but in recent years the joint KMG/ADP tanker fleet has been making more inroads into this trade.

CPC shipments for the Black Sea-Mediterranean route tend to be transported on either Aframax vessels (80,000 mt cargo size) or Suezmaxes (135,000 mt cargo size). In 2023, 135 shipments of CPC grade oil were made from Novorossiisk to discharge locations in the Mediterranean on Aframax tankers, while 134 were made on Suezmaxes, according to S&P Global Commodities at Sea data.

Freight rates for Black Sea Aframax voyages have been highly volatile since the start of the fourth quarter of 2023, but the trend in recent weeks has been decidedly bearish. Platts, part of S&P Global Commodity Insights, assessed the rate for the 80,000 mt Black Sea-Med route at $13.60/mt on March 1, down by 43% from $23.94/mt on Feb. 1.

Source: Platts