Lukoil Commissions Uzbek Gas Process Plant
Russian independent Lukoil has completed construction of the first stage of the Kandym gas processing plant in Uzbekistan, according to the country's state news agency November 6.
According to Uzbekistan National Agency, Lukoil commissioned the first stage of the Kandym facility five months ahead of schedule. The capacity of the first stage is designed to process 4.05bn m3/yr, while the final volume is 8.1bn m3/yr by July 2018. Lukoil has 90% stake and the Uzbekneftegaz’s share is 10% at the project. Some news sources reported the completion November 5.
Lukoil CEO Vagit Alekperov attended an inauguration of related facilities September 25. The Russian firm and a consortium of contractors, led by South Korea's Hyundai Engineering, in February 2015 signed a service contract for the supply of equipment and construction of the Kandym process plant at a cost of $2.66bn; total investment in this project in the first phase is estimated at $3.3bn.
Lukoil has been implementing the Kandym project since 2004 in cooperation with Uzbekneftegaz as part of the Kandym-Khauzak-Shady production sharing agreement. The Kandym group of fields includes six gas/condensate fields: Kandym, Kuvachi-Alat, Akkum, Parsankul, Khodji and Western Khodji.
Lukoil, with $6.5bn already spent, is the largest foreign investor in Uzbekistan and it planned to invest a further $3bn in Uzbekistan to boost its gas output in the country from 6.5bn m³/yr to 16bn m³/yr by 2021-2022. Of that, half will come from Kandym, 5bn m³/yr from Gissar and 3bn m³/yr from Khauzak.
Neither the government nor Uzbekneftegaz has published oil and gas production statistics since 2012. However Uzbekistan produced 62.8bn m³ sales gas in 2016, about 8.4% more than 2015, the BP Statistical Review of World Energy in mid-2017 said. The country’s gas exports were 11.4bn m³ last year.
According to Lukoil’s annual report, Uzbekistan accounts for a quarter of its gas output, which is high-margin gas as it is sold mostly to China. China imported 4.34bn m3 Uzbek gas in 2016, just over twice as much as it did the year before. It has a contract to import 10bn m³/yr Uzbek gas.
Ilham Shaban, Dalga Khatinoglu