Gazprom supplies to Uzbekistan under a new contract may amount to 6 billion cubic meters per year
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In the fourth quarter, Gazprom will begin deliveries of pipeline gas to Uzbekistan in transit through Kazakhstan via the Central Asia-Center pipeline. According to Kommersant, we are talking about the supply of about 6 billion cubic meters of gas per year. Tashkent lacks its own gas production to cover the peak consumption in winter. According to analysts, the purchase of 6 billion cubic meters from Gazprom will allow Uzbekistan to meet its own needs, but it will not be enough to fully fulfill the contract for gas exports to China.
Gazprom and Kazakhstan’s QazaqGaz signed an agreement on the transportation of Russian gas to consumers in Uzbekistan and a road map to prepare the country’s gas transmission system (GTS) for its acceptance and transportation. The planned delivery date is the fourth quarter of 2023, Gazprom announced at SPIEF-2023. According to Kommersant, we are talking about the supply of up to 6 billion cubic meters per year, or about 18 million cubic meters per day. Delivery volumes will be updated every year. Transit of gas from Russia will go through the gas pipeline “Central Asia – Center” (CAC), passing through the territory of Kazakhstan and Uzbekistan.
Gazprom, the Ministry of Energy of Uzbekistan and Kazakhstan did not respond to Kommersant’s request.
Due to the decline in gas exports to Europe, Gazprom is trying to redirect part of the volumes to the countries of Central Asia. In November last year, the company began discussing with Kazakhstan and Uzbekistan the creation of a “gas union” for the supply of Russian gas to the domestic markets of these countries and its possible transit to China.
This winter, Uzbekistan faced an energy crisis caused by abnormal frosts and the suspension of gas supplies from Turkmenistan. There were massive power cuts in the country, there were interruptions in heat supply and gas supply to consumers. Uzbekistan’s own production is declining due to the depletion of reserves; in winter, the country lacked up to 20 million cubic meters per day during peak loads. In 2022, gas production in the country decreased by 4% year-on-year, to 51.7 billion cubic meters. Production in 2023 may increase to 56.3 billion cubic meters.
Due to winter interruptions, Uzbekistan could not fulfill its export obligations to China, freezing supplies for three months. Beijing and Tashkent signed a contract for the supply of up to 10 billion cubic meters of gas annually, but these volumes have never been delivered in full.
As Uztransgaz reported, about 10% of the gas produced in Uzbekistan is exported to China. Volumes fluctuate from month to month, in winter supplies are minimal. The head of Uztransgaz, Bekhzot Narmatov, admitted that in 2025-2026 Uzbekistan could completely abandon gas exports to China due to growing demand within the country.
Sergei Kondratyev of the Institute of Energy and Finance expects domestic gas demand in Uzbekistan to rise to 51-52 billion cubic meters in 2023 (48.4 billion cubic meters in 2022). If supply restrictions were not introduced on the domestic market, consumption could already be seen above 52-53 billion cubic meters, he believes, adding that imports from Russia will be enough to meet these needs. “But it will be necessary to carry out modernization to launch the CAC in reverse mode. Most likely, one branch will be allocated for supplies,” he believes.
At the same time, Uzbekistan’s problems with exports to China will still remain, Mr. Kondratiev believes. So, in the first quarter of 2023, only 86 million cubic meters were exported to China. “I expect that in general, in 2023, supplies to China will not exceed 2.5-3 billion cubic meters, in 2024 they will reach 5-6 billion cubic meters, mainly due to the growth of gas imports from the Russian Federation for deliveries to consumers within the country,” he says.
Evgenia Popova from Vygon Consulting agrees that the contract with Russia will allow Uzbekistan to cover the shortfall in domestic consumption in 2024, especially given that this shortfall is seasonal. Ms. Popova believes that over time, deliveries from Russia are likely to grow, since in addition to obligations to China, Uzbekistan has plans to develop gas processing and export value-added gas chemical products. She notes that, given the half-century age of the CAC, a full survey of the linear part of the gas pipeline will be required, as well as re-equipment and modernization of compressor stations to operate in reverse mode. In her opinion, if one of the three lines of the CAC is used in reverse mode, the technically possible volume of supplies is 7-10 billion cubic meters per year.
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