Investments in Uzbek oil and gas market to hit $18.65 billion

May 15, 2015 12:00 AM

Uzbekistan's national oil and gas company, Uzbekneftegaz plans to invest an estimated $18.65 billion in the development of the country's oil and gas industry.

"The investment will be placed under the state program on modernization, technical and technological renovation of the oil and gas industry," Shokir Faizullaev, chairman of Uzbekneftegas, said at the 19th Uzbekistan Oil and Gas three-day international conference, which started in Tashkent on May 12.

President Islam Karimov approved the state program covering the period until 2020, he noted.

The program envisages the realization of 54 investment projects in the oil and gas industry in the next five years. In particular, 39 projects will be implemented through a funding scheme worth $7.1 billion.

One of the largest projects is the fourth section of gas pipeline to be built to China under an agreement between the China National Petroleum Corporation (CNPC) and Uzbekneftegaz. This pipeline section will provide natural gas supplies from Central Asia to China in the volume of 20 billion cubic meters per year to a cost of $800 million.

The project also envisions the construction of a new plant of hydrocarbons pyrolysis under Uz-KorGasChemical. The plant with a capacity of 30,000 tons of benzene, 20,000 tons of toluene and 5,000 tons of xylene per year will require an investment of $300 billion.

These projects will allow Uzbekistan to increase its mining capacity to 8.55 billion cubic meters of gas, 71,700 tons of oil and 161,000 tons of gas condensate, as well as liquefied gas production, polymers and other products of deep natural gas refinery.

Uzbekistan plans to raise its annual production of hydrocarbons by 1.9 percent in 2019 as compared to 2014 and natural gas by 2 percent, according to Uzbekneftegaz.

Uz-KorGasChemical, which a joint venture between Uzbekneftegaz and Korea Gas Corporation KOGAS, Honam Petrochemical and STX Energy, is involved in conducting the Ustyurt Gas Chemical Complex - worth $3.9 billion.

The complex will refine 4.5 billion cubic meters of natural gas on an annual basis and produce up to 4 billion cubic meters of marketable gas, 387,000 tons of polyethylene, 83,000 tons of polypropylene and 102,000 tons of pyrolysis gasoline.

In addition, CNPC and Uzbekneftegaz plan to construct a gas and chemical complex on the basis of the Uzbek gas refinery plant in Mubarek, south Uzbekistan. The new plant will produce polyethylene and liquefied natural gas.

Furthermore, the companies are implementing a $2.9 billion project enabling to produce olefins from natural gas by manufacturing polymers.

Uzbekistan is in the top ten gas producing countries in the world and ranks third in the CIS countries after Russia and Turkmenistan. The country's gas industry is mainly concentrated in the areas of Gazly and Karshi.

Uzbekneftegaz, which unites six joint companies, is a monopoly operator of the oil and gas complex in Uzbekistan.

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