On March 27, 2020, construction of the plant railway infrastructure was launched at the construction site of the GTL plant in Kashkadarya region, as part of the "Production of synthetic liquid fuel based on purified methane of Shurtan Gas Chemical Complex" Investment Project.

 

According to the Project, a total of over 11 km of railway tracks will be built, including 6.5 km to be built within the Plant area, with 4 overpasses allowing to maintain up to 8 tank cars and accept up to 32 tank cars all at the same time.

 

The railway infrastructure is being constructed by professionals - specialists of Uzbekiston Temir Yullari JSC", by order of  Shurtan GCC and through extensive collaboration of Uzbekistan GTL LLC and Uzbekneftegaz JSC specialists.

As of March 30, 1.6 km of internal railway tracks have already been built.

 

The railway infrastructure under construction will ensure annual shipment of up to 1.5 million tons of high-quality and environmentally friendly oil products under Oltin Yo'l GTL trade mark from Uzbekistan GTL Plant to the domestic market and for export.

 

Despite the current epidemiological situation in Uzbekistan and all over the world, construction of the largest plant for production of synthetic liquid fuel in the region is in progress, with all necessary preventive measures taken to protect the life and health of every employee involved in implementation of this strategically important project

 

Press center of Uzbekistan GTL

On February 1, 2020, a field meeting led by M.R. Abdullayev, the Chairman of the Board of Uzbekneftegaz JSC, was held at the Construction Site of “Production of synthetic liquid fuel on the basis of purified methane of Shurtan Gas Chemical Complex” Investment Project in Guzar district of Kashkadarya Region.

The meeting was attended by executive managers of Uzbekneftegaz JSC, Uzbekistan GTL LLC, and heads of the Project directorates of the EPC Contractor - Consortium of Hyundai Engineering Ltd.   and Enter Engineering Pte. Ltd., TechnipFMC, Project Management Consultant, as well as responsible specialists.

During the field meeting, M. R. Abdullayev, Chairman of the Board of “Uzbekneftegaz” JSC, reviewed in detail the construction of key process units of the GTL Plant, including the Central control room.

At the end of the meeting, the Chairman of the Board directed to speed up execution of construction works, through fullest possible leveraging of specialists, equipment and resources, and issued a number of other instructions to ensure timely completion of construction and start-up of the Plant this year.   

Press-center of Uzbekistan GTL

On January 22, 2020, a delegation of Fund for Reconstruction and development of the Republic of Uzbekistan and Russian lenders of the Project, visited the Construction Site of the GTL Plant in Uzbekistan. The delegation is comprised of representatives of Gazprombank JSC, Roseximbank JSC, the Russian Agency for export credit and investment insurance (EXIAR), as well as the Fund for Reconstruction and development of the Republic of Uzbekistan which are among the key partners of the Project.

The current status of the Project and progress of construction and assembly works had been presented by representatives of Uzbekistan GTL, and issues of further mutually beneficial cooperation under the “Production of synthetic liquid fuel based on the purified methane of the Shurtan Gas Chemical Complex” Investment Project, had been discussed during the visit.

The delegation also met representatives of TechnipFMC, the Project Management Consultant.

For reference: At the moment, about 9 thousand people are involved in implementation of the Project, of whom over 7.5 thousand are involved in construction and assembly works. 905 units of construction and special equipment were mobilized at the construction site. The progress is well under way.

In total, 901 out of 1,045 (or 86% of the total quantity) process equipment packages were delivered to the construction site, with nearly 600 packages already installed in the process area (with a total weight of over 31,000 tons).

Gazprombank JSC, Roseximbank JSC, EXIAR and the Fund for Reconstruction and development of the Republic of Uzbekistan participate in financing of the “Production of synthetic liquid fuel based on the purified methane of the Shurtan Gas Chemical Complex” Investment Project (UzGTL/Oltin Yo’l GTL Project).

The program of the Russian delegation's visit includes a scheduled meeting with representatives of Uzbekneftegaz JSC, where the parties will discuss further mutually beneficial cooperation between the companies.

Press-center of Uzbekistan GTL

            At present, the selection process has been completed and an award ceremony for the winner of the UzGTL Scholarship contest was held at the construction site of the plant and in the Tashkent office of the Company.

            In addition to the ceremony of presenting diplomas and memorable gifts to the Company, a tour of the construction site of UzGTL plant and familiarization with the Tashkent offices and employees of the Company was organized, as well as a large festive table was set up for all employees and guests of the event in honor of New Year celebration.

            As it was previously reported, 12 students were identified at the end of the contest, which proved to be comprehensively developed, as well as the programs that meet the above requirements. According to the conclusions of the organizational commission, the following students are the winners of the Company's first scholarship program:

1. Abdramanov Jetkerbay Parakhatbayevich, Karakalpak State University;

2.  Dusmurodov Begzod Sobir ugli, Karshi Engineering and Economic Institute;

3.  Quzibayev Shikhnazar Farhod ugli, Tashkent Institute of Chemistry and Technology;

4.  Quziev Javlonbek Musamadovich, Tashkent State Technical University named after Islam Karimov;

5.  Murodova Yulduz Malikjon qizi, Bukhara Institute of Engineering and Technology;

6.  Nuraddinov Nuraddin Odamboy ugli, Bukhara Institute of Engineering and Technology;

7.  Sunatov Shohrukh Shamsiyevich, Mirzo Ulugbek National University of Uzbekistan.

8.  Usmanov Umidjon Ravshan ugli, Turin Polytechnic University in Tashkent;

9.  Halimov Adkhambek Akram ugli, Karshi Engineering and Economic Institute;

10. Ashirov David Shavkatovich, Branch of Gubkin Russian State University of Oil and Gas;

11. Gavhar Rashidovna Akhmedzhanova, Branch of Gubkin Russian State University of Oil and Gas;

12. Mukhiddinov Sherzod Sanjar ugli, Branch of Gubkin Russian State University of Oil and Gas.

            The winners of the Scholarship Program will receive UzGTL Scholarship on a monthly basis for one academic year, and they will be provided with assistance in completing their production and pre-diploma internships, as well as being included in the company's personnel reserve for further employment at GTL plant.

            Uzbekistan GTL Company once again congratulates all the winners of the Contest, wishes them success in their studies and achieve high results in their future professional activities in the oil and gas industry.

As part of multilateral cooperation of Uzbekneftegaz JSC with KEXIM and K-SURE, at the invitation of the Uzbek party, the delegation of the Export–Import Bank of Korea, headed by Director Mr. Koh Jung-Yul, and representatives of the Korea Trade Insurance Corporation, headed by Mr. Oh Jung-Hyun, Senior Director, visited Uzbekistan.

On December 12, 2019, the delegation visited the GTL Plant Construction Site in Kashkadarya Region, where they got acquainted with the current status of the Project and the progress achieved.

During the visit, representatives of Uzbekistan GTL LLC made a presentation of the current progress of construction and assembly works, and discussed matters of further mutually beneficial cooperation under the “Production of synthetic liquid fuel based on purified methane of Shurtan Gas Processing Complex” Investment Project.

The Export–Import Bank of Korea and Korea Trade Insurance Corporation participate in financing of the “Production of synthetic liquid fuel on the basis of purified methane of Shurtan GCC” Investment Project.

The program of the visit of the delegation includes a meeting with the management of Uzbekneftegaz JSC, at which the parties will discuss further mutually beneficial cooperation with the companies within the framework of successfully implemented and ongoing investment projects.

Press-service of JSC "Uzbekneftegaz"

Dear students,

We inform you that the first stage of the competition, which lasted from September 15 to October 15 of this year, has been completed on receiving a scholarship from “Uzbekistan GTL” LLC for students of higher educational institutions, namely, the deadline for submitting applications was 18:00 on October 15, 2019. During this time, we have received more than 850 applications in electronic version from university students to participate in the Competition. The Commission is currently considering and evaluating applications.

As previously reported, the 2nd stage of the competition was planned to be held in Tashkent and Karshi. However, given the large number of applications from students studying in Bukhara, Navoi and Nukus, the dates and venues of the competition will be as follows: 1.October 19, 2019 - on the territory of the Tashkent branch of the Russian State University of Oil and Gas named after Gubkina, in Tashkent. 2. October 21-22, 2019 - at the Karshi Engineering and Technology Institute, Karshi. 3. October 23, 2019 - on the territory of the Bukhara Engineering and Technology Institute in Bukhara.

In total, 272 applications were received from undergraduate students in Tashkent, of which 172 were selected for the second round of the scholarship program:

Currently, electronic applications from the cities of Karshi, Bukhara, Nukus and Navoi are being considered, which will be announced shortly.

Attention! Students who have not submitted their passport or student ID will not be allowed to take exams.

Construction-and-assembly operations are in progress at the Construction Site of GTL Plant for production of synthetic liquid fuel in Kashkadarya region. Over 33% of the total construction works has already been completed. Production and delivery of materials, as well as technological equipment to the Construction Site have reached their final stage. Assembly and installation of Fischer-Tropsch reactors – the so - called "heart" of the gas-in-liquid (GTL) process - have almost been completed. The current progress of the reactors assembly exceeded 93%. Completion of reactor installation is scheduled for this September. To date, more than 6 thousand workers and specialists, including foreign ones, have been involved in construction works, and about 750 units of equipment have been mobilized.

At least 100 specialists of Uzbekistan GTL LLC will undergo operational training and probation in 2019-2020 at the Oryx GTL Pant in Qatar under agreements reached as part of the staff training program for the GTL Plant, initiated by Uzbekneftegaz JSC, for further training of local specialists for commissioning and operation of the Plant. Oryx GTL in Qatar, is similar to the Plant being constructed in Uzbekistan, in its production capacity and technology.

Oryx GTL is a synthetic liquid fuel producing plant based in Ras Laffan Industrial City of Qatar. The plant is owned by Qatar Petroleum (51%) oil and gas company and Sasol (49%). Production output of Oryx GTL in 2007 reached 34 thousand barrels per day of liquid oil products. GTL Plant under construction in Uzbekistan will produce about 38 thousand barrels per day.

The first 25 specialists of Uzbekistan GTL Plant have already been taking operational training at the Qatar Plant which will run from June to July of this year. Uzbekistan GTL specialists participate in the process of mode operation and maintenance of the Plant. At the same time, with the close assistance of the plant personnel, the main production bottlenecks which arose during Oryx GTL Plant commissioning and operation stages, are being studied so as to prevent them during the start-up of Uzbekistan Plant and ensure its stable and smooth commissioning.

“-We have met experienced specialists who have been working at the Oryx GTL Plant for many years, and very carefully and in every details share with us their experience of the plant commissioning and operation. We find very friendly atmosphere here. Specialists of the Qatar Plant do not hide great interest in the GTL Plant being constructed in Uzbekistan. Our colleagues have also heard a lot about Uzbekistan, especially about Samarkand and Bukhara, and told us that they plan to visit these famous city-museums. Surely, this is most welcome and encouraging. We are very pleased to know this. What most surprised our colleagues is that our delegation is very young, and they are glad that such young professionals as we are, will startup the Plant at home. In my experience, this will be the second plant, in start-up of which I will take part, it is not only a great honor for me and my colleagues, but also a great responsibility, which we are fully aware of, and therefore we try to study as much as possible all the nuances of start-up and management of the Plant...”- Nosir Zakiryanov, head of Commissioning and Operation Department of Uzbekistan GTL, shares his impressions.

This agreement will upgrade professional skills of Uzbekistan specialists and enable them to learn process operations of Oryx GTL and its commissioning and maintenance. Besides, as part of the staff training program, in 2019-2020 the company's specialists will undergo specialized training at plants of process equipment manufactures and technology licensors abroad. Honeywell UOP Uzbekistan has also expanded its technology center in Uzbekistan for training and education of GTL Plant specialists.

Uzbekistan President Shavkat Mirziyoyev has initiated a wave of economic reforms in the country since he assumed power at the end of 2016 following the sudden death of predecessor Islam Karimov, who remained in the top post for 27 years.

The reforms aim to introduce more economic freedoms to the Uzbek population and to promote private entrepreneurship as the country prepares to deregulate prices of commodities, including natural gas, while increasing the country’s exposure to the world economy.

The drive has been led by Mirziyoyev, who personally oversees new key projects and initiatives, including exploration and production targets, and issues orders to Uzbekneftegaz and other state-owned companies.

“We have received clear instruction from the President to ensure the presence of large international oil and gas companies in the country,” says Uzbekneftegaz chairman Bakhodirzhon Sidikov.

Progress

When not visiting construction sites across Uzbekistan, Mirziyoyev monitors the progress of important projects via conference calls that sometimes may include thousands of listeners, or direct regional meetings.

A graduate of the Tashkent Institute of Irrigation & Agricultural Mechanisation Engineers in 1981, Mirziyoyev opted to continue his career with the institute until 1992.

After holding several government posts, he was appointed Uzbekistan’s prime minister in 2003, a position that gave him greater insight into the heavily regulated Uzbek economy, which was subject to sudden and frequent fluctuations during Karimov's rule.

One famous example of government intervention was the 2010 dismantling of private sector conglomerate Zeromax, which held a significant stake in the country's oil and gas and mining industries.

Zeromax, which fell under the control of Karimov’s daughter Gulnara following its quick growth, was once Uzbekistan's largest private-sector employer, with over 27,000 employees and more than $1 billion in annual revenues.

Goal

In addition to market liberalisation, Mirziyoyev is also understood to he behind a goal to make landlocked Uzbekistan an energy-independent country, despite the steep price of such an effort.

The country is preparing to start developing its coal reserves, estimated at about three trillion tonnes, with coal being considered a cheaper alternative to gas despite its more harmful environmental footprint.

However, in the view of the president, burning gas for heating of homes and greenhouses is “barbarism”, according to the country’s recently appointed Energy Minister Alisher Sultanov.

Mirziyoyev has clearly indicated that natural gas should be used as feedstock to produce chemicals and polymers, which have significant added value, rather than sent to export destinations, Sultanov says. To make more gas available for conversion into polymers and synthetic fuels, Mirziyoyev has also approved programmes to increase energy efficiency and develop alternative energy sources in the country.

Earlier in May, Sultanov and the executive director of Russian state nuclear operator Rosatom, Alexei Likhachyov, signed a road map to build the first ever nuclear power plant in Uzbekistan.

Construction of the facility is expected to start in 2022 and will take at least seven years to complete, with the project set to be financed by Russian banks.

 

Uzbekneftegaz set to face sweeping changes

Authorities in Uzbekistan have laid out a plan to break up state-owned oil and gas conglomerate Uzbekneftegaz in a bid to increase transparency and provide equal terms for other players in the country’s oil and gas sector, writes Vladimir Afanasiev.

According to Uzbekneftegaz chairman Bakhodirzhon Sidikov, the company may be split into three businesses as early as the end of this year.

The first company will encompass Uzbekneftegaz’s oil and gas assets. It will also include gas processing and polymers plants as well as oil refineries.

The second company will take ownership and control of Uzbekistan’s oil and gas trunkline networks, which are currently operated by a subsidiary of Uzbekneftegaz.

Major players in Uzbekistan, such as Russian oil producer Lukoil, China National Petroleum Corporation and others, want to see the networks operated by a government-owned organisation independent from the oil and gas producer, Sidikov says.

Finally, the third company will embrace regional gas distribution to deliver gas to end users in the country, he says.

Initially, the authorities expect a single company to deal with regional gas distribution and sales.

However, this operator will later be split into several units, with the government hoping for private investors to buy minority stakes in the newly established gas distributors.

According to Sidikov, Uzbekneftegaz has sought advice for its reform plan from Boston Consulting Group. A steering committee has already been established, with Lukoil and other international players offering advice on the deregulation.

“We need to understand how smoothly we can effect this transformation, because in our opinion it is a very difficult task,” Sidikov says. “However, the country needs to use its energy resources more efficiently. Private companies are more inclined to do that.”

Sidikov has acknowledged the challenges facing deregulation, including the secrecy that surrounded the oil and gas industry during the nearly three-decade tenure of former president Islam Karimov.

“For every information disclosure to a potential partner, we had to obtain a Presidential decree to permit us to do that,” Sidikov says.

“We are preparing changes to legislation so we can openly share information on Uzbekistan's oil and gas reserves, fields and production statistics with investors.”

Uzbekneftegaz long neglected to provide sufficient investment in its upstream projects, especially its oil producing sector, Sidikov acknowledges.

To reverse the decline, President Shavkat Mirziyoyev has signed a decree to speed up exploration activities in the country, according to Sidikov.

A second decree calls for Uzbekneftegaz to carry out a massive well workover programme to tap remaining reserves at its existing fields, bringing in foreign partners and investors.

Uzbekneftegaz is also going deeper with drilling, with good results from wells already seen in the Ustyurt gas province.

“We will consider moving drilling rigs to other regions [of the country] to explore deeper layers,” Sidikov says.

Authorities hope the country’s gas production will rise to 70 billion cubic metres by 2025.

Uzbekistan expects its total gas output this year to hit about 63 Bcm, of which 43 Bcm will be produced by Uzbekneftegaz and around 16 Bcm by privately held Russian company Lukoil.

Uzbekistan plans to invest $33bn in its oil and gas sectors during 2019-2025, but the focus is to be on the mid- and downstream sectors, senior officials from government and the oil company Uzbeknekftegaz told journalists in Tashkent mid-May.

Converting gas to value-added products as well as improving the grid, where a fifth of the country’s total production is lost, is where the country will direct its efforts, once it has achieved a modest rise in output in the coming few years.
State-run Uzbekneftegaz, which accounts for 70% of the gas production and 15% of its gross domestic product said that over the last year, investments in this sector totalled $2.3bn and of that, $952.5mn came from overseas. It expects to see investments this year rise to $2.6bn, of which about $1bn will be from abroad.
Uzbekistan attracted a total $2.6bn in foreign direct investment (FDI) last year, so the share of foreign investment in the oil and gas sector is significant. For the current year, the country expects to receive $4.1bn FDI in all sectors.
Two major downstream projects are the expansion of the Shurtan gas to petrochemicals (GTP) plant, as well as its gas-to-liquids plant (GTL).
The $1.765bn Shurtan GTP expansion contract was signed in November 2017, adding 280,000 mt/y of output. It will turn 3.9bn m³/yr of raw gas into 3.6bn m³/yr of purified methane which will be delivered to the GTL plant.
The GTL plant will cost $3.6bn and turn the 3.6bn m3/yr methane into 307,000 mt/yr of kerosene, 724,000 mt/yr of diesel, 439,000 mt/yr of naphtha and 53,000 mt/yr of LPG. The produced naphtha will then return to Shurtan to be converted into 505,000 mt/yr of various polymers. Uzbek energy minister Alisher Sultanov told NGW on the sidelines of the 23rd international exhibition and conference "Oil and Gas of Uzbekistan” that the GTL plant will be ready by end-2020. Of the overall cost of GTL plant, $2.3bn has already absorbed from various financial sources. “We import 1mn mt/yr of liquid fuels,” he said. “The GTL plant will allow us to end that. We have the Shurtan expansion, expected to become full operational in 4Q 2021 and then there will be a third plant for converting methane to olefins (MTO).”

“Currently Uzbekistan supplies gas to its neighbors and China,” Sultanov said. “In 2016, we approved a plan to boost production by 30% to 73bn m3/yr by 2021. That gas will be used both for export and for processing into value-added products. For 2019, we plan output of 63.6bn m3 – 43bn m3 will come from Uzbekneftegaz. The group of investors includes Uzkimyosanoat, Air Products & Chemicals, Uzbekneftegaz and Singaporean Enter Engineering signed a contract May 20 to construct the MTO, which is designed to convert 1.5bn m3/yr of gas into a range of petrochemicals.
Coming to the expansion of Shurtan, Uzbekneftegaz will invest $350mn of its own money and the rest of the financing will come from Gazprombank, Credit Suisse, Mitsubishi UFJ Financial Group and China Development Bank.
Enter Engineering has been developing the plant under a technology licence from Chevron and CB&I Lummus. The plant is due to be complete in the fourth quarter of 2020. Uzbek gas production grew by just 6.1% last year to total 59.84bn m³, the central Asian republic's state statistics committee said January. The gain fell far short of the planned 16.8%. However, Sultanov said the volume would reach 63.6bn m3 in 2019 and 73bn m3 in 2021. Most of that output growth would be directed at the two Shurtan plants.

For the next years, the focus would be on maintaining the production level and improving the grid, where a fifth of total production vanishes.

Sultanov also said that about 90% of power generation in the country comes from gas. “In 2020s, GDP is expected to grow constantly at a high rate and the domestic energy demand will increase. For instance, we expect electricity demand to grow from 62.8 TWh in 2018 to 110 TWh by 2030,” he said.
Uzbekistan and Russian Rosatom have signed a contract to build a 2.4-GW nuclear power plant which is projected to become operational by 2028. The plant would release another 3.7bn m³/yr of gas for local industry and households.

Sultanov said about 30% of the gas produced is used in the residential sector. The country has raised gas prices for domestic market five times since 2014 with a further increase due mid-2019 in order to dampen demand and save on subsidies.
According to the International Energy Agency, Uzbekistan's subsidies totalled $3.8bn for gas (up 4.9% year on year) and $1.3bn for electricity (up 52%) in 2017, together representing 12% of GDP.

The country has planned to increase gas and electricity prices for domestic consumers by 12% from June 1. But the prices are still a long way below international markets: som 350/ m³ or about $41/”000 m³.
Russian private producer Lukoil produced 13.42bn m3 last year and Gazprom also produced 0.4bn m3 in 2018. Uzbekneftegaz  is supposed to pay Lukoil a higher price for the gas than it can sell it for on the household market. But Lukoil claimed in March that Uzbekistan had racked up $600mn in debt in 2018, as it took more than its share of gas for the local market and did not pay for it in full.

Lukoil’s share of production from Uzbekistan is likely to grow to 14.5bn m3 this year, of which the Russian company plans to deliver 5bn m³ to local customers. The rest will be sent to China and Russia.
Since 2004, Lukoil has spent $8bn in Uzbekistan. CEO Vagit Alekperov said April 25 that the company plans to invest $2bn in its Uzbek gas projects to boost production to  18bn m3/yr by 2020.

Uzbekistan also plans to expand the upstream activities, but mostly it is aiming at maintaining the production level rather than growth.
In May, UK major BP, state-run Azeri Socar and state Uzbekneftegaz sealed an agreement to jointly study the prospects for the exploration and development of a number of blocks including Uzbek part of the Aral Sea, Sam-
Kosbulak and the Baiterek investment blocks of the Ustyurt region.

Separately, Socar subsidiary Nipi Neftegas signed an agreement with staterun Uzbekneftegaz to increase hydrocarbon production at the country’s West Tashli, East Tashli, North Shurtan and Garmiston fields, using advanced methods and technologies from Socar, the Uzbek company announced  May 19.

Uzbekistan exported 8bn m3 to China, 0.5bn m3 to neighboring countries and about 7bn m3 to Russia in 2018 (including Lukoil and Gazprom’s share). The country plans to increase exports to China to 9bn m3 in 2019.
“We also plan to transit 40bn m³: of that, 3bn m³ will be Turkmen gas to Russia and the rest, Turkmen gas to China; and deliver 1bn m3 to Kazakhstan’s southern regions,” Sultanov said. However, an official told NGW anonymously that the country’s revenues from gas transit is very low, without mentioning any figure.
State-run Uzbekneftegaz will be split up and also it will try to raise $2bn in new debt as it bids to compete with international rivals, CEO Bahodirjon Sidikov said May 15.
“The company constitutes 70% of Uzbekistan’s gas production and 15% of GDP, but fundamental reform is needed,” he told journalists.

The CEO said the firm will be split into three independent companies operating in the upstream, mid-stream, and downstream segments, to improve “management and transparency”. The plan for the demerger should be completed this year, he told NGW.
Sidikov also spoke of plans to sell a $1bn Eurobond in mid-2020 and borrow a further $1bn from the Asian Development Bank. The proceeds would be used to “help accelerate investments,” he added, especially to improve the state of the country’s gas grid, through which around one-fifth of total production is currently lost.
Uzbek energy minister Alisher Sultanov said that the state is busy carrying out reform across all of the country’s energy sectors in a bid to boost efficiency, productivity and transparency, and to boost revenue.

As part of the talks, foreign guests were provided with information on the ongoing reforms in fuel and energy sector of Uzbekistan. Other aspects of the partnership in this area were also discussed. 

In turn, representatives of China Development Bank expressed their satisfaction with reforms being implemented in Uzbekistan fuel and energy complex, noting the increased interest and desire of foreign investors to cooperate. They also provided information on activity of the financial institution, positive experience in implementation of key investment projects in oil and gas industry of our country.

The successful participation of the Bank in funding of construction of a new plant for production of synthetic liquid fuel - Uzbekistan GTL, was cited as an example.

On the basis of the parties ' interest in strengthening the partnership, representatives of China Development Bank were proposed to consider participation in the projects “Expansion of production capacities of Shurtan Gas Chemical Complex”, introduction of Automated Gas Fiscal Metering System, production of olefins (CTO) and liquid fuels from coal (CTL).

Following the meeting, it was agreed to continue the dialogue and explore potential of the cooperation.

 

 

Journalists were able to see the process of the facility construction, acquaint themselves with process equipment delivered to GTL facility, and with the Gas Chemical Complex located in the south-western part of Uzbekistan, in the desert zone of the Karshi steppe, based on Shurtan gas condensate fields.

 

The Gas Chemical Complex is located in the south-western part of Uzbekistan, in the desert zone of the Karshi steppe, and is based on Shurtan Gas Condensate Fields.

 

The history of the Complex dates back to 1996, when the Cabinet of Ministers of the Republic of Uzbekistan issued a decree, according to which it was decided to construct Shurtan Gas Chemical Complex for polyethylene production. The Complex has become one of the best projects implemented by Uzbekneftegaz in the years of independence, and completed in record-breaking time. In August 2002, upon completion of commissioning, the first “Uzbek” polyethylene with UzClear® trademark was produced.

 

The Plant area includes gas and condensate treatment unit, compressor stations, process units and many other auxiliary facilities. The Plant’s key production processes are polyethylene production workshop and ethylene production workshop.

 

In terms of production capacity of the Plant, the annual indicators are as follows:

 

- feed gas: up to 3.9 BCM;

- commercial methane: up to 3.5 BCM;

- polyethylene granules: more than 125 thousand tons;

- liquefied gas: more than 100 thousand tons;

- gas condensate: about 1.5 thousand tons;

- granulated sulfur: about 1.5 thousand;

- aluminum composite panels: more than 750 thousand square meters; and

- pipes, hoses and fittings for pressure pipelines and drip irrigation system: more than 4.5 thousand tons.

Implementation of the project “Production of synthetic liquid fuel based on purified methane of Shurtan Gas Chemical Complex” (UzGTL) commenced in 2016, thanks to active and successful operations, being carried over during many years, and availability of qualified personnel and infrastructure. The project is being implemented in accordance with the Decree of the President of the Republic of Uzbekistan dated December 29, 2016 No. PP-2706 “On additional measures for implementation of investment project “Production of synthetic liquid fuel based on purified methane of Shurtan GCC”.

 

According to the project objectives, the project should:

 

- expand capacities for deep processing of natural gas;

- reduce import of hydrocarbons;

- cover domestic demand in high-quality and environmentally friendly fuel;

- provide the market with strategic products made of domestic raw materials.

 

The Plant for production of synthetic liquid fuel from natural gas is called “Oltin Yo'l Gas to Liquids” (GTL) and being constructed 1.5 km away from Shurtan Gas Chemical Complex. This Plant will be one of the largest plants producing synthetic liquid fuels, and one of the largest and most technologically advanced projects in the history of oil and gas industry in the region.

 

To date, Oltin Yo'l GTL with a total cost of US$ 3.6 billion is one of the most capital-intensive investment projects, being implemented in Uzbekistan. It is being financed by Uzbekneftegaz JSC, Uzbekistan Fund for Reconstruction and Development, China Development Bank, Export-import Bank of Korea, Korea Trade Insurance Corporation, Gazprombank JSC, Roseximbank JSC and Russian Agency for Export Credit and Investment Insurance.

 

The Plant will have annual production capacity of more than 1.5 million tons of high-quality synthetic liquid fuel, meeting Euro 5 standard, including 743.5 thousand tons of diesel, 311 thousand tons of aviation kerosene, more than 431 thousand tons of naphtha and more than 50 thousand tons of liquefied gas.

 

The technology process of the GTL Plant is based on three main stages, which are required for conversion of purified methane into GTL products, including diesel, kerosene, naphtha and LPG.

As of today, more than 6.5 thousand workers have been mobilized to the Construction Site: builders, engineers and specialists, of whom more than 500 specialists are foreigners. There are more than 450 units of heavy and special construction equipment being utilized.

 

A unique special equipment is being used in construction of the facility, including the world's most extra-power cranes, with a height of a 25-storey building, having the longest telescopic arrows, with the length exceeding 100 meters and lifting capacity of up to 1500 tons. There are only a few such cranes in the world and they are used on a pre-agreed schedule.

All possible international logistics routes are largely involved in delivery of high-volume and process equipment, units and devices to Uzbekistan.

Consistent activity is being implemented in the country on integrated development of the fuel and energy sector and diversification of energy sources, the GTL project is an example of these.

These days, two units of the main large-size technological equipment with a weight of 350 and 550 tons are on the way of the territory of Uzbekistan. It will be delivered to the construction site of a plant for the production of synthetic liquid fuel (GTL project) in Kashkadarya region in March. The purpose of the new plant is the in-depth processing of natural gas, with the production of kerosene, diesel fuel, naphtha and liquefied gas.

This investment project is being implemented in accordance with the decree of the President of the Republic of Uzbekistan " Production of synthetic liquid fuels on the basis of the Shurtan Gas Chemical Complex at the methane purification base" (No. PP-2706 of December 29, 2016). Currently, the main large-size technological equipment is on its way from Karakalpakstan to Kashkadarya region. Prior to this, through several countries, several thousand kilometers have been crossed through major sea routes and logistic routes of the Republic of Korea to Uzbekistan.

These units – weighing 550 tons, 39 meters long and 6,9 meters in diameter, as well as weighing 350 tons and 25 meters long, will be used in the workshop of the plant for producing synthetic liquid. Thanks to these units, generated synthesis gas (methane + oxygen) will be converted into synthetic liquid fuel as a result of physic-chemical reactions and technological processes – the so-called semi-finished product from which, after a series of processes, the main oil products, such as diesel, kerosene and naphtha will be produced.

To date, the implementation of the project GTL entered the active phase. At the construction site mobilized more than 5000 workers, builders and engineers, involved more than 500 units of construction and special equipment.

Construction of the GTL plant in Uzbekistan continues at the active pace. Overall in the implementation of the contract exceeded 71%. Construction works are being continued at the site of the plant for the production of synthetic liquid fuel in the Kashkadarya region, which has been completed by more than 25%. In total, more than 11,000 units of technological equipment are manufactured for more than 129 plants in 24 countries of the world for the GTL plant under construction in Uzbekistan. Currently, delivery of high-tech and large-sized equipment to the construction site is carried out.

More than 116 sets of high-tech equipment were delivered to the construction site, their installations have already begun. 153 sets have already been directed to the construction site by manufacturers and are on their way to Uzbekistan.

Implementation of the GTL project will provide an opportunity to ensure the annual import substitution of petroleum products in the amount of up to 1,5 million tons.

The raw material base for the plant producing synthetic liquid fuel is the purified gas of the Shurtan Gas Chemical Complex, its volume consists of 3,6 billion cubic meters per year.

It should be noted that the GTL project implementation will provide an opportunity to ensure the annual import substitution of petroleum products in the amount of up to 1.5 million tons. The raw material base of the plant for the production of synthetic fuel - Shurtan Gas Chemical Complex is a methane with an annual capacity of 3.6 billion cubic meters.

Annual production of the plant will be more than 1,5 million tons of high-quality synthetic liquid fuel that complies with the Euro-5 standard, including 743,5 thousand tons of diesel fuel, 311 thousand tons of aviation kerosene, more than 431 thousand tons of naphtha, more than 50 thousand tons of liquefied gas.

The press service of the Ministry of Energy of the Republic

The stable outlook reflects the agency’s expectation that, over the next year, Uzbekistan’s fiscal and external net asset positions will remain strong, albeit decline slightly, due to expected future current account deficits and government borrowing. “We could raise the ratings if monetary policy effectiveness were to improve, for example through a decline in dollarization of the economy. Further diversification of the government’s revenue base or the composition of the economy’s exports would also be supportive of the ratings,” the agency said. “We could lower the ratings if the fiscal or external positions deteriorated, for example if fiscal deficits increased beyond our base-case scenario or if higher-than-expected current account deficits led to an increase in external financing needs. We could also lower the ratings if we observed increasing weakness in key state-owned enterprises (SOEs), leading to growing contingent liabilities for the government,” S&P Global Ratings said. “Our ratings on Uzbekistan are supported by the government’s strong fiscal and external positions. These strengths predominately arise from the government’s large asset position, which stems partly from the policy of transferring part of the revenues from commodity sales to the Uzbekistan Fund for Reconstruction and Development (UFRD),” the statement of S&P Global Ratings said. “Our ratings are constrained by Uzbekistan’s low economic wealth, as measured by GDP per capita. In our view, future policy responses may be difficult to predict, given the highly centralized decision-making process and that accountability and checks and balances between institutions are relatively underdeveloped. Our ratings are also constrained by low monetary policy flexibility,” the agency noted. S&P Global Ratings said institutional And Economic Profile: Reforms have begun to open up the economy but challenges remain Broad-based policy reforms have improved institutions, albeit from a low base, and opened up the economy. “We expect decision-making to remain centralized. GDP per capita remains low, at an estimated $1,200 in 2018. We expect real GDP growth to remain relatively strong, averaging 5% over our forecast period to 2021,” the agency said.

UzDaily

Short-term IDRs of the country in both currencies are assigned by the Agency at the level “B”, the rating of the country ceiling is at the level “BB-”. “Uzbekistan’s rating is counterbalanced with the low level of public debt and data on high economic growth compared to other countries with similar ratings, strong commodity dependence, high inflation, and structural deficiencies in terms of GDP per capita,” the Agency explains. Fitch expects that the country’s economy to grow by 5% in 2018, while this indicator of growth will slow to 4.9% in 2019. The Agency considers, that the growth rate will reach 5.3% in 2020. “The growth will be based on public investments into strategic projects, housing and infrastructure costs,” the report notes. The country’s rating can be upgraded if the progress in strengthening of the macroeconomic stability is occurred. At the same time, a steady decline in foreign exchange reserves and a weakening of the sovereign balance can lead to a negative rating action. Sovereign credit rating is a tool to assess the readiness of the state to meet its financial obligations in prompt and full manner. In July, the government of Uzbekistan attracted a consortium of the banks led by JP Morgan Chase to obtain a sovereign credit rating and issue sovereign bonds. In accordance with the decree of Mr. Shavkat Mirziyoyev, the President, the funds received from the bonds placement will be used for social programs activities and construction of infrastructure. Mr. Jamshid Kuchkarov, the Deputy Prime Minister, Minister of Finance stated in September that the government considers the sovereign rating as one of the ways to diversify sources to attract funds from abroad. Obtaining a sovereign credit rating will contribute to the growth of foreign direct investment, expansion of cooperation with foreign partners, as well as to the creation of favorable conditions for the banks and companies in attraction of the credit funds at the global financial markets at the lower interest rates, the Deputy Prime Minister noted. In November, he stated that after received the rating in the first quarter of 2019, it is planned to issue bonds at the foreign market. In addition to Fitch, the authorities also work with two other rating agencies – Moody’s and Standard & Poor’s. Their ratings are expected before the end of the year.