Page 11 - bne Magazine August 2022

bne August 2022 Companies & Markets I 11
decrease imports of hydrocarbons; satisfy local demand for high-quality and environmentally friendly fuel; and provide the market with strategic value-added products made
from our own raw materials,” said Energy Minister Alisher Sultanov at the launch of the plant in December.
At the Tashkent Energy Forum in June, First Deputy Energy Minister Azim Akhmedkhadjaev also talked of the need to develop deep processing production of high value added products from hydrocarbons.
Alisher Bakhadirov head of the downstream department at state oil and gas company Uzbekneftegaz, said Uzbekistan saw the potential of investing into petrochemicals projects such as GTL or methanol-to-olefins (MTO). He told journalists on June 24 that Uzbekistan doesn’t need the Central Asia-China pipeline, and while gas was previously transported via other pipelines or as LNG, the priority now is to feed domestic petrochemicals production.
Uzbekistan plans to increase natural gas production by more than 20% by the end of the decade, Bloomberg reported, citing Ahmedhojaev in March. Gas production is to rise to 66.1 bcm in 2030 from 53.6 bcm last year.
At the same time, Uzbekistan plans to move partially away from using gas to produce electricity, as it embarks on its green transition. Numerous renewables projects – wind, solar and hydro – have been initiated since 2019, as Tashkent faces the challenge of supplying energy to its growing population while at the same time reducing greenhouse
gas (GHG) emissions in line with its Paris Agreement and COP26 commitments. Gas, meanwhile, will still be sent to supply modern CCGT plants that will make up the shortfall when weather conditions mean it can’t produce enough from renewables facilities. That should also ease the energy shortages that sometimes plague the country in winter despite its gas resources.
Targeting the local market
In line with this strategy UzGTL is initially targeting the local market with its production. “The first need is to sell to the local market and after that if we have capacity to sell for export we will,” Kholmatov told bne IntelliNews.
Odiljon Karimov, first deputy general director of UzGTL, said new products are likely to be added in future, but the current focus is on finishing all the commissioning works and on starting production of the initial range of GTL products.
Commenting on expected demand, Karimov noted at
a briefing for journalists that the launch of domestic production, making products cheaper and more readily available, may cause demand to increase, reducing the availability of products for export.
“When we carried out a feasibility study we found we can cover almost 80% of the local demand [for diesel], however,
when there is product availability the demand also increases, we see from previous products,” said Karimov.
“Once we provide the fuels to the local market, when the people see the business opportunity they can open new business, more businesses means more demand. That’s why in future we can see that even our full amount will not be able to cover demand in future,” he added.
Feeding the domestic plastics industry
Another mega project is now in the works at an earlier stage, the MTO project being developed by Sanoat Energetika Guruhi (SEG). Construction of the plant is set to cost over $2.5bn, and is expected to be completed by end-2024.
“The MTO project is one of the biggest now in the pipeline of investment projects in Uzbekistan dedicated to the new trend strategy to develop the county, monetisation of gas, creating the added value chain, and allocating all the value processes here in Uzbekistan,” Nigora Ibadova, head of the Gas Chemical Complex MTO, told journalists in Tashkent on June 24.
“Instead of selling gas as raw material we are now focusing on establishing the premises which could treat the gas and produce the fuels which are in big demand in the country.”
Ibadova references the country’s rapid population growth; already the most populous country in Central Asia its population is expanding each year by more than 600,000. “This means the consumption of many, many end products is increasing. One of those is products containing different polyolefins,” she said.
Gas processing is being developed at the same time as the future textiles industry. Just like gas, Uzbekistan is seeing a trend of “decreasing sales of cotton as a raw material, instead making centralised clusters to produce all the value chain like ready-made clothes. To increase the variety of products which could be produced with the use of cotton we need synthetic fibre,” explained Ibadova. Uzbekistan already has the fifth-largest producer of synthetic carpets in the world, but this currently depends on imports of artificial fibres from Turkey.
The developers of the MTO plant have been working closely with local producers that are currently importing polymers to ensure they produce what the industry needs. Just like the UzGTL plant, the MTO plant will focus on the domestic market. When it starts operation, 70% of its products will be sold on the local market, and the remaining 30%, mostly polypropylene, will be export production.
As for the GTL plant, however, this may change as the deep processing of Uzbekistan’s gas to create industrial inputs is already expected to lead to the creation of new businesses and new industrial sectors within the country.
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