MUMBAI. September 25. KAZINFORM. Before 2009, Kazakhstan plans to invest over USD1.6 bln in modernization and reconstruction of all three refineries - the total investments will be about USD1 billion in the Atyrau refinery, USD600 million in Shymkent, and USD40 million in Pavlodar petrochemical plant, which will render possible for all three refineries to switch to new production standards such as Euro-5, and to install additional facilities, for example facilities for catalytic cracking in Atyrau refinery. The active development of petrochemical projects in Kazakhstan have been stimulated by several factors, primarily due to significant hydrocarbon reserves in the Caspian region and growth of consumption in both the internal and export markets. The three oil refineries in Kazakhstan, currently do not operate at full capacity, mainly due to a lack of demand for their products. The refineries produce fuel oil, diesel fuel, motor gasoline, jet fuel and liquefied gas. Their output is characterized by a low level of refining depth, which does not exceed 55%. As a result, an average workload of these refineries is maximum 65% with an aggregate designed output of 18.5 million tons. In general, production of the three refineries is closely approximated to that of other refineries within FSU countries. The major drawback of the system that adversely affects development of transport infrastructure for delivering crude and refined products is the uneven distribution of hydrocarbon fields in the country. Under such circumstances it is sometimes necessary to import crude oil and oil products, from Russia as well, especially for Eastern parts of Kazakhstan, Kazinform quotes plastemart.com. Experts assume that dynamic development of oil processing industry requires further modernization of the existing facilities (refineries), as well as construction of new ones. The added supply will meet demand projected to grow because of the growing number of cars in the country. This will enable to increase output of light-end oil products and to expand the production range. With this in view, the Kazakh government has launched a program to develop the petrochemical industry and has made a decision to create an industrial park assigned with all functions of a special economic zone. Based on calculations made by local specialists, 1 million cu. m of associated gas can be processed to yield 130 tons of ethylene, about 85 tons of polyethylene and about 60 tons of polystyrene. By 2015 it is planned to attract up to USD7.5 billion of investments as well as experience and technologies of the largest companies working in this sector in order to develop the industry. New petrochemical facilities are being planned in the vicinity of hydrocarbon fields, especially in West Kazakhstan. Construction of a large petrochemical complex to produce upto 800,000 tons of ethylene and 400,000 tons of polypropylene has been planned in Atyrau region. Geographical vicinity to China will aid 50% of petrochemical output to enter the country. The Kazakhstani producers are projected to face competition in China from the Middle East countries, especially from Saudi Arabia, as well as the large similar projects put into operation in China.