Lukoil Steps Up Pace of Uzbek Project

Russia's largest privately owned oil company Lukoil will put into operation the second stage of Uzbekistan’s 4.05bn m³/yr Kandym gas processing plant (GPP) a couple of months before the scheduled date of July 2018, Uzbekneftegaz has announced. The first stage, which has the same capacity, was completed last November.

The Kandym block comprises six gas fields: Kandym, Kuvachi-Alat, Akkum, Parsankul, Khodji and Western Khodji. "Tthe ceremony of launching the second pha se of Kandym GPP in April 2018 was agreed upon," said the state-run enterprise.

The Russian firm and a consortium of contractors, led by South Korea's Hyundai Engineering, signed in February 2015 a service contract for the supply of equipment and construction of the Kandym plant at a cost of $2.66bn. The total investment of the first phase is estimated at $3.3bn.

Lukoil, which has already spent $6.5bn, is the largest foreign investor in the former Soviet republic of Uzbekistan and it plans to invest a further $3bn to boost its gas output 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.

WB helps Uzbek price reforms

For fourth time since 2014, Uzbekistan plans to increase gas prices for domestic consumers, this time by 10% from April 1. The World Bank plans to assist Uzbekneftegaz in developing a tariff policy for gas in the domestic market, the company's press service said February 9.

Deputy chairman of Uzbekneftegaz Ulugbek Ashurov held talks with the WB mission on a plan to develop gas supply within the republic. Ashurov said reforms were planned and that the company would also expand abroad. In recent couple of years, domestic gas demand has grown 1.3 times and reached 50bn m³/yr. The country, which also exports gas, increased sale gas production by 0.5% to 56.417bn m³ in 2017.