Page 9 - AsianOil Week 50 2022

AsianOil EAST ASIA AsianOil

dampener on any optimism regarding additional Kazakhstan and Uzbekistan forming a unique
Kazakh gas volumes available for export. hub with an enhanced energy partnership. His-
torically, since Soviet times the three countries
Conversion of plants have been linked by a common gas transport sys-
At Kazakhstan's end, a big change is the con- tem with a transfer capacity of 40-50 bcm/year.
version of major electricity-generating plants The gas transport system is still operational
in the country’s economic capital, Almaty, from and could be used for swap operations and the
running on coal to being powered by gas, with re-exporting of gas to third countries. Neverthe-
the objective of cutting polluting emissions by less, Kazakhstan and Uzbekistan are in no rush
80%. The announcement of the shift was made to join such a union with Russia amid the grow-
in August this year amid reports of a potential ing Western economic backlash against their big
gas deficit in the country. neighbour to the north based on swingeing sanc-
Some experts have argued that starting from tions. This week Uzbekistan poured cold water
2024, Kazakhstan may face sharp depletions of on the idea of going as far as a gas union, saying
available gas and fuel in light of growing domes- it would prefer instead to stick to individual,
tic consumption, and that therefore measures unlinked commercial contracts on gas supply .
to evade that eventuality must be taken. This
could mean Kazakhstan not proceeding with Severe challenge
gas exports from 2023. Notwithstanding, China Rising domestic energy consumption is also a
has sought assurances that Astana will stick to severe challenge for Uzbekistan. It lately entirely
gas exports in 2023, considering the vast Chinese stopped exporting natural gas and looked to
domestic consumption. But additional Kazakh increase gas imports amid renewed difficulties
energy exports to China seem unlikely. with power outages across the country.
As things stand, the only viable option for Kazakhstan’s overall gas exports to China
Kazakhstan to boost energy export is a gasifi- in 2022 look set to be around only 4mn cubic
cation of the country’s eastern and northern metres of a planned 75mn cubic metres. That
provinces using Russian gas deliveries and, in would be the lowest such export volume in 10
tandem, a re-routing of Kazakh gas resources for years.
export. In this vein, President Tokayev met with China will suffer from the decrease in natural
Vladimir Putin on November 28 in Moscow. The gas exports from Kazakhstan. But the Kazakhs
two presidents discussed a tripartite “gas union” won’t find a way to substantially up gas exports
proposed by Putin that would coordinate deliv- while at the same time meeting domestic energy
eries of Russian gas to Kazakhstan and Uzbeki- demand without exploring and developing new
stan and possibly across all of Central Asia. gas fields and speeding up the building of addi-
Given that Russia is seeking a stronger pres- tional gas processing plants. On the other hand, if
ence in the Asian energy market in response to the gas union survives the initial scepticism and
Western plans to push Russian deliveries out goes operational, China could find an answer in
of the European energy market, Kazakhstan importing additional Russian gas perhaps com-
could become the main transit hub for Russian bined with more Kazakh and Uzbek gas.
gas flows to China. The scenario could enable Fuad Shahbazov is an independent policy
Kazakhstan to meet domestic consumption analyst focusing on regional security issues in
demands in eastern and northern provinces that the South Caucasus and a Chevening FCDO
lack the necessary infrastructure for deliveries, scholar at the University of Durham School of
such as pipelines. Government and International Affairs (SGIA) .
The proposed gas union envisages Russia, He tweets at @fuadshahbazov. ™

Week 50 16•December•2022 www. NEWSBASE .com P9