Page 18 - bne_newspaper_June_07_2019

Eurasia
June 7, 2019 www.intellinews.com I Page 18
It’s now or never for an Uzbek gas boom
Kanat Shaku in Tashkent
Natural gas production in Uzbekistan goes all the way back to the Soviet-era. But following the USSR’s collapse, the Uzbeks did not manage to exploit the hydrocarbon-rich export path pursued by neigh- bours Kazakhstan and Turkmenistan. Those two net energy exporters grew to depend heavily on oil and natural gas, respectively. In contrast, Uzbeki- stan, where annual natural gas production currently stands at around 63bn cubic metres (cm), has consumed most of its own gas output.
The gas consumption of Uzbekistan, Central Asia's most populous nation, reached as much as 43bn cm in 2017, for instance. But the country's natural gas export contracts are mainly limited to agree- ments for up to 5bn cm of exports to Russia and 10bn cm of exports to China. In China’s case, the exports have never breached the 10bn cm thresh- old – they stood at between 8bn-9bn in 2018.
Times are a changin’
But the times they are a changin'. The ongo-
ing drive to reopen Uzbekistan to foreign inves- tors may eventually lead to more formidable gas export volumes. The government has set a goal of raising natural gas production to 70bn cm by 2025 and talks on resuming the construction of the Uzbek-stretch of the Central Asia-China pipeline’s Line-D are proceeding.
“We are now in a discussion with Chinese colleagues on Line-D,” chairman of state- owned oil and gas company Uzbekneftegaz, Bahodirjon Sidikov, told bne IntelliNews during the Uzbekistan International Oil & Gas Exhibition & Conference (OGU 2019) in Tashkent. “We
Map showing an approximation of the route taken by the Central Asia-China pipeline.
already have a schedule and plans for resuming construction of Line-D, but currently no physical activity has started.”
Sidikov did not disclose the exact dates for the schedule and plans, but since all Uzbek gas exports to China are accounted for by Line-C of the Central Asia-China pipeline, it may not be a stretch to expect some Uzbek gas to be involved. Though it is entirely possible that Line-D will exclusively focus on annually exporting 30bn cm of gas from Turkmenistan, with Uzbekistan's gas transit to China currently standing at around 40bn cm per year.
Aside from raising gas output, Uzbekistan has introduced measures to lower some domestic gas consumption by bringing in an increasing reliance on renewable energy for electricity generation and raising gas and electricity tariffs for the general population.
The Uzbek authorities have so far this year reached agreements on foreign investment in the hydrocarbons sector worth $1.2bn and are eye- ing the possibility of raising this figure to $1.5bn by end-2019, Sidikov said. Many of these projects involve exploration and development of gas fields.
“We have a portfolio of 30 projects currently re- lated to exploration, gas processing, [among other things],” Sidikov told journalists. “These projects are part of our 2025 plan –15 of these projects are currently ongoing.”
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