BAKU, Azerbaijan, Dec. 28
By Klavdiya Romakayeva - Trend:
Uzbekistan is a lower-middle-income country and the most populous country in Central Asia. Its economy continues to rely heavily on the export of gold, fuel, and cotton. The main trading partners of Uzbekistan are Switzerland (mainly as a market for its gold exports), China, and Russia.
Today, the following energy projects are being developed in the country:
The nuclear power plant in Uzbekistan
Russia and Uzbekistan signed an agreement on cooperation on the construction of a nuclear power plant (NPP) in early September 2018. The contract for the construction of the nuclear power plant was planned to be signed by the end of 2019 and to start the work at the beginning of 2020.
A site near Lake Tuzkan in the Jizzakh region of Uzbekistan was selected as a priority for the construction of the station.
A state loan from Russia will be attracted to finance the construction of the nuclear power plant. The project for the construction of the power plant itself is divided into three main stages:
2019 - 2020 - site selection and licensing of NPP siting;
2020 - 2022 - design of a nuclear power plant and objects of its external infrastructure;
2022 - 2030 - construction and commissioning of the nuclear power plant.
The first power unit of the nuclear power plant is planned to be launched in 2028, the second - 18 months after the launch date of the first.
The NPP will consist of two VVER-1200 generation "3+" power units with a capacity of 1,200 MW each. After putting it into operation, Uzbekistan will be able to reduce emissions of carbon dioxide into the atmosphere to 14 million tons and nitrogen oxides - by 36,000 tons.
As a result of the launch of the station, Uzbekistan will save 3.7 billion cubic meters of natural gas annually. Even if you export the saved gas without processing it, the country will receive 550-600 million dollars a year.
Project status
In September 2018, an agreement was signed in Moscow on the construction of a nuclear power plant in Uzbekistan.
In October 2018, it became known that the area near the Tudakul reservoir on the border of the Bukhara and Navoi regions was chosen as the priority site for the construction of the nuclear power plant. Later, it was replaced by the area near the Aydarkul Lake in the Farish district of the Jizzakh region, on the border with the Navoi region, and engineering surveys were started to select the site for the construction of the station.
In February 2019, in order to implement a project for the construction of a nuclear power plant in Uzbekistan, under the Uzatom Agency, the Directorate for the construction of a nuclear power plant was formed, which is the single customer for the construction of the facility, and which in the future will be transformed into an operating organization of Uzbekistan’s nuclear power facilities. The concept for the development of nuclear energy in Uzbekistan for the period 2019-2029 and the roadmap for its implementation was also approved.
In May 2019, Russia and Uzbekistan agreed on the site where the nuclear power plant will be built. Rosatom and the Ministry of Energy of Uzbekistan have approved a roadmap for the implementation in 2019-2020 of the main measures for the construction of a nuclear power plant. Also, the State Unitary Enterprise Directorate for NPP Construction of the Uzatom Agency and Atomstroyexport JSC signed a contract for the implementation of engineering surveys at the NPP construction site for the development of the NPP technical design and a priority site for the NPP location near Lake Tuzkan was determined, the water from which is supposed to be used for cooling reactors.
In July 2019, it became known that Uzbekistan plans to build two additional power units of a nuclear power plant of 1.2 GW in addition to the already planned complex.
In December 2020, it was reported that the contract for the construction of a nuclear power plant was basically ready; the parties were working on technical aspects. In particular, the work is underway on reducing water consumption at the station.
Independence of Uzbekistan investment block, Exploration, and production of oil and gas (Uzbekiston Mustakilligi)
Independence of Uzbekistan investment block includes additional exploration and development of “25 years of Independence” gas field and the construction of a gas chemical complex in the Surkhandarya region.
The “25 Years of Independence” field belongs to the category of deposits with hard-to-recover reserves, high sulfur content.
The cost of the project is $5.8 billion. The project will be implemented in two stages. At the first stage, during 2018−2022, it is planned to carry out drilling, field development, geological exploration at the investment block, construction of infrastructure, and a gas processing plant with a capacity of five billion cubic meters. The cost of the first stage is estimated at more than $2 billion.
At the second stage - from 2023 to 2025 - it is planned to build a gas-chemical complex for the production of polymer products in the amount of up to 500,000 tons per year. The project is designed for 35 years.
The project will be financed with the involvement of large international institutions and export credit agencies.
Due to this and other projects, the country expects to increase gas production by 53.5 billion cubic meters of oil by 1.9 million tons, and gas condensate by 1.1 million tons in 2017-2021.
The production sharing agreement (PSA) for the Independence of Uzbekistan investment unit was signed by the government with a consortium of investors consisting of Gas Project Development Central Asia (GPD, Gazprom International subsidiaries), Altmax Holding, and Uzneftegazdobycha (Uzbekneftegaz subsidiary) in early April 2017.
Project status
Implementation of the Early Gas program has begun at the Mustakillikning 25 Yilligi field. The first stage of this program involves the drilling of exploration wells. According to the Ministry of Energy, SGCOC (Surhan gas chemical operating company) has signed a contract with the international service group Eriell for the construction of 15 exploration and appraisal production wells in the field.
In March 2019, the operator completed 3D field seismic work on an area of 160 square kilometers and started 2D seismic in the amount of 400 linear kilometers. The contractor is BGP, a division of China National Petroleum Corporation.
Surhan gas chemical operating company (SGCOC) started exploration drilling in the Surkhandarya region in southern Uzbekistan under a production sharing agreement (PSA) in April 2019.
In July 2019, the drilling and construction of appraisal well No. 1-O at the Mustakillikning 25 Yilligi (M25) field was successfully completed. As a result of the development of the XVI horizon, an industrial gas flow was obtained with an average daily flow rate of 300,000 cubic meters of oil.
Hydrocarbon production increase project for 2017-2021
The project provides for the construction and repair of wells, oil and gas field capacities, and other things worth $1 billion.
The cost of the project amounts to $3.908 billion.
Uzbekneftegaz JSC, together with interested ministries and departments, has developed a Program to increase hydrocarbon production for 2017-2021 to maintain and further increase hydrocarbon production at oil and gas and gas condensate fields in the Ustyurt, Bukhara-Khiva, Surkhandarya, and Fergana regions.
An agreement has been reached between Uzbekneftegaz and Gazprombank JSC on co-financing the Program on mutually agreed terms; Uzbekneftegaz and Gas Project Development Central Asia AG, an affiliate of PJSC Gazprom (Russia), established the Natural Gas Stream Joint Venture in the form of a limited liability company within the framework of the investment project “Exploration of the Sechankul investment blocks, Akjar and Chimbay, as well as the development of the Urga field, the Akchalak, and Chandir groups ", carried out in accordance with the decree of the President of Uzbekistan Shavkat Mirziyoyev dated September 22, 2016.
Project status
Completed and planned works:
Construction and commissioning of new wells, taking into account additional equipment and modernization of drilling rigs:
2019 - 94 pieces, cost - $300.3 million;
2020 - 82 pieces, cost $239.6 million;
2021 - 78 units, cost - $208.9 million.
Workover of wells, taking into account the addition and modernization of well workover units:
2019 - 66 pieces, cost $7.2 million;
2020 - 86 pieces, cost $8.8 million;
2021 - 104 pieces, cost $12.2 million.
Construction of new gas pipelines (field and inter-field)
2019 - 55 km, cost $7 million;
2020 - 50 km, cost $7 million;
2021 - 45 km, cost $6.3 million.
In November 2020, Uzbekneftegaz JSC discussed with Gazprombank JSC the allocation of advanced financing in the amount of $100 million and a long-term loan in the amount of $180 million, which is being worked out jointly with a syndicate of Russian financial institutions as part of the financing of the second stage of the program to increase hydrocarbon production in Uzbekistan in 2017-2021.
I and II blocks of Turakurgan Thermal Power Plant
The project is located in the Namangan region, 280 kilometers east of Tashkent, the capital of Uzbekistan. The total installed capacity of the plant is 900 MW and consists of two units (configuration 2 + 2) each with an installed capacity of 450 MW.
The cost of the project is $ 1.195 billion.
The launch of the Turakurgan TPP will create 900 MW of additional capacity or seven billion kWh of electricity per year and will provide the main demand for electricity in the Fergana Valley - Namangan, Andijan, and Fergana regions.
According to experts' forecasts, the efficiency of combined-cycle plants will be about 59 percent, which is twice the parameters of traditional steam generating stations, and emissions into the atmosphere during the operation of power units are almost halved.
The project was financed by the Japan International Cooperation Agency (JICA) ($704 million), the Fund for Reconstruction and Development of Uzbekistan ($300 million), and Uzbekenergo's own funds.
The JICA loan is provided for a period of 40 years, including 10 years of a grace period, with an interest rate of 0.3 percent.
The first unit of the combined cycle plant of the TPP was put into operation in the second half of August 2019, and the first 300 MW of electricity was produced. This will provide 70-80 percent of the electricity for the Namagan region.
Project status
The construction of two combined cycle gas turbines with a capacity of 450 MW each was completed at the Turakurgan TPP. After launching the second combined cycle plant at full capacity, the station operates according to the established schedule. Both combined-cycle plants will annually generate 6.7 billion kWh of electricity, and the conventional amount of fuel consumed to generate 1 kW / hour of electricity is 221.2 grams per kWh.
Pskem hydroelectric power station
The Pskemskaya HPP will be built in Uzbekistan, on the Pskem mountain river (Syrdarya basin). The construction of the station is one of the largest hydropower projects in Central Asia. The design capacity of the Pskemskaya HPP is 400 MW, the average annual power generation is 958.5 million kW / h.
The total cost of the project will exceed $800 million, including $240 million in loans from the Chinese Eximbank. The rest is invested by Uzbekistan itself.
It is envisaged to build an earth dam 195 meters high, the highest in Uzbekistan and one of the largest in Central Asia.
The public joint-stock company RusHydro, the largest Russian generating company and the second-largest hydro-generating company in the world, helps in the construction of Uzbekgidroenergo JSC.
The construction of the Pskemskaya HPP is of great importance for increasing the reliability and efficiency of the energy system of Uzbekistan. With its commissioning, the volume of the country's highly maneuverable regulatory capacities will increase by 1.5 times, and the annual flaring of more than 290 million cubic meters of gas will be prevented. The Pskemskaya HPP project is being implemented by Uzbekgidroenergo JSC, a state-owned company that unites all hydropower plants in Uzbekistan.
Project status
In November 2019, construction began on the first, largest of the proposed, Pskemskaya HPP, which is scheduled to be commissioned in 2023.
To date, a construction headquarters has already been established at the site of the construction of the facility, about 400 specialists work there, design, exploration, and geological work are being carried out. General construction works have started on the left bank of the Pskem River.
As of March 2020, it was reported that all additional engineering surveys and studies have been completed:
two wells were drilled with a depth of 300 meters along the axis of the selected section of the dam;
two inclined wells were made for the river bed;
an analysis of the geofiltration situation with additional studies on three experimental filtration wells was carried out;
the fracturing of Neogene rocks is described with the compilation of a model of fracturing of the massif;
geophysical surveys were carried out on the surface of pits and along the routes of underground structures;
the deformation and shear tests of Neogene siltstones were completed in an open area and in a specially passed research adit (stamp-testing).
Navoi Thermal Power Plant Modernization Project
The goal of the project is to increase the supply of electricity and heat.
The cost of the project amounts to $316 million. Funding is implemented by Japan. The government of Uzbekistan received a loan from the Japan International Cooperation Agency (JICA) to co-finance the Navoi Thermal Power Plant Modernization Project.
The station consists of 11 power units with a capacity of 50 megawatts to 420 megawatts; at present, obsolete power units have been removed from generating capacities.
In 2009, the President of Uzbekistan Shavkat Mirziyoyev set the task of modernizing and reconstructing the station's capacities, which was divided into three stages. The first stage was implemented in 2009-2012, the second in 2017-2019, the implementation of the third stage is scheduled for 2019-2023.
At the first stage of modernization and reconstruction of the Navoi TPP in 2012, the first combined-cycle gas turbine unit (CCGT-1) with a capacity of 478 MW was put into operation in the energy system of Uzbekistan. After the commissioning of CCGT-1, the plant's capacity was 1,618 megawatts, before it amounted to 1250 megawatts. As a result of the commissioning of CCGT-1, the annual savings of natural gas at the station amounted to about 350-400 million cubic meters per year, and for the period of operation from 2013 to 2018 - about 2.3 billion cubic meters worth $105 million. A consortium of companies “Çalik Energi” (Turkey) and “Initec Energia” (Spain) was selected as the executor of the project.
At the second stage, an agreement was signed between the consortium of Japanese companies Mitsubishi Corporation and Mitsubishi Hitachi Power Systems and the joint-stock company Uzbekenergo on the construction of a combined cycle plant with a capacity of 450 megawatts and a cost of $448 million. The project was implemented by the consortium of Mitsubishi Corporation and MHPS and the Turkish company Calik Energi. In 2017, during a trip to the Navoi region, Mirziyoyev laid the capsule for the construction of the second combined cycle plant (CCGT-2).
As a result of the commissioning of the combined cycle plant, 3.454 billion kilowatt-hours of electric and thermal energy will be generated per year. According to calculations, by reducing the consumption of equivalent fuel required for the production of one kilowatt-hour of electricity, savings of up to 500 million cubic meters of natural gas will be achieved, and 112 jobs will be created.
The efficiency of traditional stations is about 30 percent, for the first combined-cycle plant at Navoi TPP this figure amounts to 55 percent, for the second - 58 percent. In September 2019, CCGT-2 was launched in test mode.
Project status
In five years, the Navoi thermal power plant will implement a project to build a third combined cycle plant (CCGT) with a capacity of 650 MW.
According to the decree of the Cabinet of Ministers of Uzbekistan on September 9, 2020, the investment project will be implemented until 2024. The commissioning of the combined cycle plant is aimed at further development of generating capacities through the introduction of modern energy-efficient technologies, improvement of power grids in the north-western part of the republic, as well as improvement of energy supply to the population of the region and its rapidly growing economy. The new CCGT unit will allow the region to save up to 550-600 million cubic meters of natural gas per year.
In order to implement this project, an agreement was signed with the Japan International Development Agency (JICA) on the allocation of a loan for a period of 30 years with a 10-year grace period in the amount of 128,246 million Japanese yen ($1.24 billion). The loan will begin after the approval of the feasibility study of the investment project. Thermal Power Plants JSC was appointed the contractor responsible for coordinating and monitoring the implementation of the investment project.
Construction of a solar photovoltaic station
Uzbekistan’s government in Washington signed a memorandum with the International Finance Corporation (IFC) on the development of up to 900 megawatts of solar energy through public-private partnership (PPP) projects.
In February 2019, Uzbekistan, with the assistance of the IFC, announced a tender to attract private investors for the construction of a 100-megawatt solar photovoltaic station in the Navoi region of Uzbekistan.
The pre-qualification selection involved 23 companies from China, South Korea, Japan, Saudi Arabia, the United Arab Emirates, India, South Africa, Russia, Spain, Norway, and France, of which 11 companies passed this selection.
Moreover, five companies submitted tender commercial offers: “ACWA Power” (Saudi Arabia); Jinko Power and Al Jomaih Energy & Water Consortium (China / Saudi Arabia); "Masdar" (UAE); TBEA Xinjiang Sunoasis Co Ltd (China) and Total Eren (France).
Acwa Power provided a price of 2.98 cents per kilowatt-hour, TBEA Xinjiang Sunoasis Co Ltd 3.586 cents per kilowatt-hour, Jinko Power and Al Jomaih Energy & Water Consortium 3.702 cents per one kilowatt-hour, Total Eren 4.273 cents per one kilowatt-hour.
According to the results of the study and evaluation of the technical and commercial proposals of the bidders, the tender commission announced the winner of the tender on October 4, Masdar (United Arab Emirates) with a tariff of 2.679 cents per kilowatt-hour of generated electricity and a construction period of 12 months.
Thanks to the efficient design, one of the lowest solar energy tariffs in the world (taking into account the level of insolation) were obtained from the competitive selection. Moreover, in accordance with the terms of the tender, the winner took serious obligations to fulfill the contract conditions, and if they are not fulfilled, significant financial sanctions will be applied (bid bond guarantee), which in turn guarantees timely and high-quality implementation of the project.
Project status
In November 2019, an investment agreement was signed in Tashkent between the Ministry of Investment and Foreign Trade of Uzbekistan and Masdar (UAE).
Masdar invests up to $100 million in the construction of a photovoltaic plant with a total capacity of 100 MW in the Navoi region of Uzbekistan.
Masdar will carry out the design, financing, construction, and operation of the power plant throughout the project period (25 years).
The start of construction work is expected in the first quarter of 2020 with the commissioning of the power plant by the first quarter of 2021.
In December 2020, the World Bank Group, Abu Dhabi Future Energy Company PJSC (Masdar), the Asian Development Bank (ADB), and the government of Uzbekistan signed loan and insurance agreements to finance the construction of a solar photovoltaic plant.
The International Finance Corporation (IFC) and ADB will provide up to $60 million to finance this project. The European Bank for Development and Reconstruction is providing Masdar with a short-term bridging loan for equity financing of the project.
The World Bank will provide a bank guarantee of $5.1 million to the government of Uzbekistan to secure the financial obligations of the National Electricity Grids of Uzbekistan under the electricity purchase agreement signed with Masdar to cover the risk of non-payment for the supplied electricity.
Construction of a solar photovoltaic station in Sherabad district of Surkhandarya region on the basis of public-private partnership
This project is part of the Program for the generation of 1 GW of solar energy, developed by the government of Uzbekistan with the support of the Asian Development Bank.
On February 1, 2020, an international tender was launched, which is aimed at attracting and selecting a qualified private developer-investor for the implementation of the project in accordance with the new law on public-private partnership (PPP).
According to the project, a photovoltaic (solar) station with a capacity of at least 200 MW AC will be built at the site selected for its implementation, located in the Sherabad district of the Surkhandarya region, including a new substation with a voltage of 220 kV and a 52 kilometers power line for connecting to Surkhan substation with a voltage of 220 kV.
Project status
A tender is currently being held within the framework of “Phase I of the Sherabad FES Project”. The Request for Proposals began on December 14, 2020, and will run until March 15, 2021.
In December 2020, it became known about the start of the project "Phase II of the Sherabad Solar Photovoltaic Station (FES) Project".
It is planned to open a tender within the framework of the project, which will be officially announced in early 2021.
Partnership with SOCAR
In May 2018, Uzbekneftegaz signed a memorandum of understanding with BP and SOCAR on exploring the possibility of conducting joint exploration and development of deposits in Uzbekistan and a memorandum of understanding on exploring the possibilities of geological exploration in the Uzbek part of the Aral Sea and on the Samo-Kosbulak and Baiterek investment blocks of the Ustyurt region of Uzbekistan.
Before that, in 2017, SOCAR and Uzbekneftegaz reached an agreement on joint oil and gas operations in Azerbaijan and Uzbekistan, as well as in third countries.
In May 2019, Uzbekneftegaz JSC also signed an agreement with SOCAR subdivision NIPI NEFTEGAZ LLC to increase oil production in the Kashkadarya region of Uzbekistan as part of the 23rd International Exhibition and Conference “Oil and Gas of Uzbekistan OGU -2019”.
The document defines basic conditions for cooperation to increase hydrocarbon production at the Garbiy Tashli and Sharky Tashli, Shimoliy Shurtan, and Garmiston fields in Uzbekistan using SOCAR's best technologies.
It is worth noting that this is the first such project of Uzbekneftegaz JSC with Azerbaijani SOCAR.
In October 2019, the parties signed a roadmap for the project.
In November 2019, Uzbekneftegaz and SOCAR will create a joint venture (JV) for trading operations.
This joint venture will be a new direction for Uzbekneftegaz JSC, which will allow developing the export markets of Europe, as well as other countries that do not have direct transport corridors with Uzbekistan.
Along with this, the parties reached an agreement allowing both accelerations of work on restoration and overhaul of wells and organization of production of oil and gas equipment and components used in drilling and overhaul of wells in Uzbekistan.
In addition, same November, Uzkimyosanoat Joint-Stock Company (Uzbekistan) and SOCAR agreed to establish a joint venture (JV) for the export of chemical products.
The official meeting on November 21 was attended by members of the delegation consisting of representatives of SOCAR, SOCAR Trading SA (trading house), and Chemtrade LLC (Saudi Arabia).
In addition, in November, it became known that the parties agreed to create a joint venture (JV) for the transportation of oil products and petrochemicals.
In February 2020, it was reported that SOCAR and British BP may sign a Production Sharing Agreement (PSA, PSA) for investment blocks in Uzbekistan. In February, SOCAR and BP specialists were planned to visit Uzbekistan to discuss the main terms of the PSA for these blocks.
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