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Uzbekistan sees gas output at around 60 Bcm in 2020, 2021

Uzbekistan expects its gas output to total around 60 Bcm in both 2020 and 2021, despite the coronavirus pandemic hitting output volumes earlier this year, deputy energy minister Bekhzot Narmatov told S&P Global Platts.

“This year it will be slightly less, and next year it will be slightly more. Due to the pandemic, demand for shipments to the East fell, and Lukoil had to cut its output temporarily for a few months to the minimum,” Narmatov said.

At the start of this year ministry officials said that Uzbekistan expected to increase gas output slightly to 60.8 Bcm in 2020, and produce the same volumes in 2021. In 2019 it produced 60.7 Bcm.

Uzbekistan’s shipments to China have not yet fully recovered to pre-pandemic volumes.

“Before the pandemic we were shipping more than 20 million cu m/day. During the pandemic this was four times less, that’s from March to August. From August we gradually started to increase, but we haven’t reached the previous level,” Narmatov said.

China requested a cut in supplies, which was shared proportionally between Turkmenistan, Kazakhstan and Uzbekistan. The three Central Asian countries ship gas to China via the Central Asia–China gas pipeline network, which has a design capacity of 55 Bcm/year.

At the start of the year Uzbek officials said they planned to export a total of 3.842 Bcm of gas this year. This included 3.532 Bcm to China, 60 million cu m to Kyrgyzstan, and 250 million cu m to Tajikistan.

Uzbekistan is not currently exporting gas to Russia.

“We are waiting for prices to change, for the market to change. At the moment it is better for us to sell gas locally than export it to the North West,” Narmatov said.

“The netback on prices for gas shipped to the North is less than $100. In Uzbekistan there are three categories of gas pricing, for the population it is around $38, for power and chemical plants it’s around $60 and commercial customers pay $100,” he added.

By 2025, Uzbekistan plans to stop exporting natural gas entirely, processing it instead into polymer products for export.

This includes the Uzbekistan GTL project in southern Uzbekistan. The plant was slated for launch at the end of this year, but this has been put back due to the impact of the coronavirus pandemic on construction.

“We are planning to finish construction work by the end of the year and commissioning will be in the middle of next year. It was slightly delayed, but not critically,” Narmatov said.

The plant has a planned processing capacity of 3.6 Bcm/year, and is set to produce 1.5 million mt/year of Euro 5 standard fuel. Uzbekistan also plans to increase capacity at the Shurtan gas chemical plant from 125,000 mt to 500,000 mt.

Oil and renewable plans

Uzbekistan plans to produce around 3 million mt of liquid hydrocarbons in 2020, before increasing output in 2021.

“We will increase output by around 13-15% next year,” Narmatov said, adding that this is due to the introduction of modern equipment and foreign experts at production projects.

Under a program to increase exploration, Uzbekistan is also planning to sign more upstream exploration deals with foreign companies. It created an exploration joint venture with Lukoil earlier this year.

To facilitate this they have redesigned the exploration process, introducing smaller blocks that are more flexible. The most promising regions for new licensing agreements are the Usyurtsky and the Bukhara-Khivinsky regions.

Uzbekistan also plans to increase the role of renewables in its energy mix over the next decade.

“We plan that in 10 years we will increase solar power to 5 gigawatts, and wind to 3 gigawatts. Then renewables will account for around 25-30% of power produced in Uzbekistan… This is the minimum. If we develop programs to subsidize renewables for the population the result will be even more,” Narmatov said.

Uzbekistan is developing new wind and solar projects with partners from the Middle East and Europe.
Source: Platts

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