DENVER, Colo. (247marketnews.com) -- Delixy Holdings Limited (NASDAQ:DLXY) is looking to make a major leap from oil trading into oil production, signing a non-binding letter of intent that could give it up to a 48% interest in the Sarybulak oil and gas project in East Kazakhstan.
The September 15 agreement with Luxembourg-based Caog S.a.r.l. gives Delixy a framework to evaluate either an equity acquisition in Tarbagatay Munay (TBM), the project's operator, or an asset merger and restructuring covering production assets, pipeline infrastructure, mineral reserves and the operating business.
The potential prize is an established energy operation positioned roughly 90 kilometers from the China-Kazakhstan border. According to Delixy, the project has supplied natural gas to China for more than 13 years through its privately owned cross-border pipeline, delivering nearly 4 billion cubic meters through April 2026.
Now, the company is adding crude oil to that equation, as commercial crude sales began in the first quarter of 2026, while TBM has approximately 100 million metric tons of approved original oil in place, according to Delixy. The company says exploration has also identified additional oil-bearing formations, including indications of lighter crude structures.
The composition of the existing production could make the asset particularly interesting. Delixy says the crude is primarily heavy naphthenic oil, a feedstock used to produce specialty naphthenic base oils for lubricants. TBM also has oil-export rights, potentially giving the project access to international markets.
“The proposed transaction represents a significant step in Delixy's strategy to expand beyond oil trading and strengthen our participation across the energy value chain,” CEO and Executive Chairman Dongjian Xie said.
Xie highlighted the project's pipeline connection to China and Delixy's existing commercial relationships in the Chinese crude market, saying the combination could enhance commercialization opportunities and diversify revenue.
If completed, the proposed move would represent a meaningful change in the company's profile. Delixy currently operates primarily as an oil-related trading company across Southeast Asia, East Asia and the Middle East. Taking an interest in production, reserves and infrastructure could give the company greater vertical exposure to the energy value chain, with proximity to China central to the thesis.
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