TASHKENT, Uzbekistan, December 26. Trend presents a review of the key oil and gas sector developments in Uzbekistan in 2024.
CNPC planning to implement perspective projects in the oil and gas industry
During a meeting between President of Uzbekistan Shavkat Mirziyoyev with Chairman of CNPC Oil and Gas Corporation Dai Houliang in China, the company announced its plans for implementing projects in Uzbekistan. The sides discussed the implementation of projects in Uzbekistan on the construction of underground gas storage facilities and modernization of gas transportation systems, the introduction of modern drilling technologies, and the training of specialists in the oil and gas industry.
Boosting the transit of Russian oil through Kazakhstan's territory
The volume of transit of Russian oil through the territory of Kazakhstan to Uzbekistan will increase from the planned 500,000 tons to 550,000 tons in 2024. In accordance with the oil supply schedule approved by the Ministry of Energy of Kazakhstan, in January KazTransOil JSC planned to supply 25,000 tons of Russian oil through the territory of the country to Uzbekistan.
Uzbekistan improving quality of base oils
Fergana Oil Refinery has launched a large-scale program to improve the quality of base oils produced. The program envisages modernization of the atmospheric-vacuum column as well as repairs to production units manufacturing mineral base oils. The goal of the program is to bring the physical and chemical characteristics of the oils to the indicators, which meet the best European standards.
Reducing diesel fuel prices
So that Uzbekneftegaz (Uzbekistan's oil and gas company) can help those who make agricultural products financially and economically, the prices for diesel fuel made at the Bukhara oil refinery by mixing synthetic diesel fuel components have been lowered by 15% compared to the prices for diesel fuel-ECO. Uzbekneftegaz offered EURO-5 SSDF diesel fuel at a reduced price of 11.6 million soums ($939) per ton from all warehouses of oil depots owned by the company.
Planning to increase imports of Russian natural gas
Uzbek Uztransgaz JSC wants to invest $470 million in 2024-2030 to increase imports of Russian natural gas. Foreign banks will provide funds to finance the project.
Modernization of main gas pipeline system
Uzbekistan will allocate funds to modernize the main gas pipeline system to increase the volume of natural gas imports to the North. The Uztransgaz JSC (Uzbek energy company) will implement the first stage of the program on modernization of the main gas pipeline system to increase the volume of natural gas imports in the northern direction for 2024-2030. The cost of the first stage of the program is $500 million. It is planned to use $13.7 million in the first quarter of 2024, of which $10.5 million are Uztransgaz's own funds and $3.2 million are direct foreign investments.
Cutting this year's gas production
Uzbekneftegaz, a state-owned holding company in Uzbekistan's oil and gas industry, aims to generate 29.3 billion cubic meters of gas this year, which is lower than earlier predictions. According to the 2024 state program, the country intends to provide the population and sectors of the economy with uninterrupted access to energy resources. Uzbekneftegaz intends to take a number of geological and technological initiatives to accomplish this goal. Among these are 95 gas wells being drilled, 81 gas wells being restored to function following a full overhaul, and 42 technological measures being implemented.
The volume of Russian transit gas to Uzbekistan from January through February 2024
The volume of Russian gas transported through the territory of Kazakhstan amounted to 1.114 billion cubic meters from January through February 2024. This volume almost reached the transited Russian gas for the entire 2023—1.28 billion cubic meters. In 2026, Russia plans to quadruple its gas supplies to Uzbekistan, reaching up to 11 billion cubic meters annually.
Importing RON-92 gasoline from Azerbaijan
Azerbaijan has started exporting RON-92 gasoline to Uzbekistan since December 2023. Uzbekistan purchased 2,321 tons (or $1.5 million) of RON-92 motor gasoline from Azerbaijan. Azerbaijan exported gasoline at a price of $650 per ton.
Planning to increase imports of Russian gas
Uzbekistan plans to increase imports of Russian gas from the current 9 million to 32 million cubic meters per day (11.68 billion cubic meters per year). As part of the investment program for the gasification of Uzbekistan worth $500 million, Russia's Gazprombank loans will be used to modernize 511 km of gas trunk pipelines and 10 gas pumping stations.
Saneg launching industrial oils and lubricants in Italy
Saneg Oil Italy, a subsidiary of Saneg (Uzbekistan's largest private oil and gas company), began producing oils and lubricants appropriate for industrial purposes under the same name brand. The industrial oil line consists of 21 items, including hydraulic, gear, compressor, circulation, and other oils used in a variety of industries. Lubricants include 15 products, such as multi-purpose complex lithium, lithium-calcium, and sulfonate, which are designed for use in automotive and industrial equipment units and assemblies.
Planning to launch automotive oils
Uzbekistan's Saneg (the largest private oil and gas company) plans to launch a line of oils for passenger cars and commercial vehicles in the second half of 2024. Automobile manufacturers will produce the oils according to their latest requirements. Saneg intends to sell these products both in the EU and Central Asian markets, including Uzbekistan.
Russia’s Gazprom planning to open representative office in Uzbekistan
Russia's Gazprom may open a representative office in Uzbekistan. The company's statement and its agenda reflect this. On May 6, the issuer's board of directors will hold a meeting through absentee voting.
Cooperating with French Axens in modernization of Bukhara oil refinery
Uzbekistan and French Axens Technology Licensor have established cooperation to design process units for the Bukhara oil refinery modernization project. It is planned that a new naphtha hydrotreating unit with a capacity of 360,000 tons per year, an isomerization unit with a capacity of 380,000 tons per year, and a unit for selective hydrogenation of pyrolysis distillate with a capacity of 60,000 tons per year will be built as part of the project.
Signing an agreement with the US Baker Hughes for service maintenance of compressor stations
Uzbekneftegaz (Uzbekistan's oil and gas company) and US Baker Hughes Company signed an agreement providing for the service maintenance of compressor stations. The sides also decided to hold a remote technical session dedicated to modern technologies and solutions for carbon dioxide utilization for specialists of Uzlitineftgaz (Uzbekistan's research and design institute for the oil and gas industry) and Uzbekneftegaz. Both sides suggested making a working group with responsible technical experts from Uzbekneftegaz, Uzlitineftegaz, and Baker Hughes. They also wanted to look into the possibility of using electric motors instead of gas turbine engines.
World Bank expressing readiness to invest in projects to reduce methane emissions
The World Bank aims to provide financial support to the projects implemented by Uzbekneftegaz (Uzbekistan's oil and gas company) to reduce methane emissions. Both sides discussed opportunities for investment in projects to improve energy efficiency, increase gas production, and reduce methane emissions.
Introducing new line of compressor oils
Uzbekistan's Saneg (the largest private oil and gas company) has introduced a line of compressor oils under the SEG Motol Compressor Oil brand, produced by the company's subsidiary SEG Motol. The German Institute for Standardization's requirements guide the production of the oils. They are designed for modern compressors of volumetric and dynamic types used in power, chemical, petroleum, metallurgical, and other industries where the oil performance level is required to be at least DIN 51506 VDL.
US Honeywell UOP planning to produce raw materials in Uzbekistan’s gas chemical complex
During a meeting between US Honeywell UOP and Uzbekneftegaz (Uzbekistan's oil and gas company), the US company revealed plans to produce linear alkylbenzenes in Uzbekistan's Shurtan gas chemical complex.
Readiness to collaborate with Afghanistan in oil and gas processing
Uzbekistan's mining companies proposed collaboration with Afghan manufacturing firms to establish large-scale infrastructure for oil and gas processing within Afghanistan. Uzbekistan is also interested in Afghanistan's oil, gas, and coal mining projects and in investing in Afghanistan's mineral and hydrocarbon resources. They sought collaboration with the Ministry of Mines and Petroleum to facilitate investment opportunities.
Increasing the amount of compensation for gasoline
Uzbekistan has established a new amount of monetary compensation paid to certain persons based on the decisions of the Interdepartmental Tariff Commission under the Cabinet of Ministers. The amount of monthly monetary compensation from the second quarter of 2024 is set at 128,700 soums ($10.13). This figure has increased by 10.7 percent compared to the same period last year (116,180 soums, or $9.15 in the second quarter of 2023).
Signing an agreement with China Petroleum Engineering and Construction Corporation to develop project for energy resources
Uzbekneftegaz (Uzbekistan's oil and gas company) has signed an agreement with China Petroleum Engineering and Construction Corporation for pre-EPC work. The pre-EPC work includes the development of basic designs for energy resources and general plant facilities based on documents provided by the licensor of technologies. However, Uzbekistan has decided to switch from making RON-80 class Euro 2 motor gasoline to making high-octane gasoline Euro 5. This will be done by implementing the project to modernize the Bukhara oil refinery. The project envisages the production of high-octane gasoline RON-92 and RON-95 of the Euro 5 class in volumes of 60 percent and 40 percent, respectively. It is planned to implement the project in "Fast-Track" mode with parallel design and construction.
Kazakhstan planning to boost the transit of Russian, Turkmen, and Uzbek gas in 2024
Energy Minister of Kazakhstan Almassadam Satkaliyev highlighted efforts to fully utilize the country's gas transit capacity. In 2023, Kazakhstan began transporting Russian gas to Uzbekistan, reaching 1.28 billion cubic meters, with a goal to increase this to 3.8 billion cubic meters in 2024 and eventually reach 11 billion cubic meters annually. Additionally, Kazakhstan plans to increase the transit of Turkmen and Uzbek gas to China to 37.1 billion cubic meters, up from 35.6 billion cubic meters last year.
US Air Products signing deal to acquire Saneg’s hydrogen production assets
US Air Products has signed a $140 million deal to acquire Saneg's (Uzbekistan's private oil and gas company) hydrogen production assets at the Fergana Oil Refinery. This strategic acquisition is in alignment with the refinery's global modernization process and represents an important step forward in the expansion and optimization of its production capabilities. Importantly, the project will open the opportunity for wider commercial use of hydrogen on the industrial production market in Uzbekistan.
Beginning the Ustyurt plateau exploration with Azerbaijan's SOCAR
Uzbek Minister of Investment, Industry and Trade Laziz Kudratov said that Uzbekistan and State Oil Company of Azerbaijan Republic (SOCAR) have begun geological exploration on the Ustyurt Plateau in Uzbekistan.
Uzbekistan's SEG Motol unveils new international-grade oils for key industries
SEG Motol, a subsidiary of Uzbekistan's Saneg, has announced the launch of new international-grade oil products designed for the construction, mining, and agriculture sectors. Up until now, we had to source these specialized products from abroad. The newly launched products include SEG Motol UTTO (Universal Tractor Transmission Oil), available in 10W-30 and 20W-40 grades. This oil meets the requirements of specialized equipment from leading international brands such as John Deere, Ford, Case New Holland, Claas, Fendt, Valtra, Challenger, Same-Deutz-Fahr, Massey Ferguson, Volvo, and Eaton.
Saneg opening new terminal in Fergana
Uzbekistan's Saneg, the largest private oil and gas company, opened a new terminal for SEG TASCO (a subsidiary of Saneg) in Fergana. In the course of the project, construction and repair work worth more than 15 billion soums ($1.1 million) was carried out, which made it possible to ensure a round-the-clock supply of various types of gasoline and diesel fuel. The loading and clearance process was reduced from one day to one hour. The terminal can supply up to 2,000 tons of fuel per day, which will ensure a reliable supply of vehicles in the Fergana Valley, especially in the winter period.
Importing oil from Russia
Saneg, Uzbekistan's oil and gas company, plans to import 550,000 tons of Russian oil by year-end, a significant increase from 154,300 tons in 2023, according to Argus. Crude oil shipments from Gazprom Neft to Saneg's Fergana refinery also rose to 132,900 tons from January to May, compared to 48,700 tons during the same period last year.
Planning major energy projects with Azerbaijan
Uzbekistan and Azerbaijan's state oil company, SOCAR, have signed an agreement for geological exploration in the Ustyurt region. Additionally, a joint trading company has been established. Efforts are also underway to organize the production of chemical reagents and oil and gas equipment in Uzbekistan, with an investment of $8.1 million, and to explore participation in upstream projects in Azerbaijan.
Saneg planning to increase its recycling of associated petroleum gas
Saneg (Uzbekistan's largest privately held oil and gas company) plans to increase its recycling of associated petroleum gas (APG) to more than five million cubic meters per month. Oil extraction releases the APG, which production sites commonly flare. However, burning APG results in economic losses and the emission of carbon dioxide into the atmosphere. The company currently captures around 3.5 million cubic meters of APG a month. Traditionally, the processing and transportation of APG have been difficult to achieve because of the gas's low pressure and high levels of impurities. Through the introduction of advanced APG recycling technology, Saneg will capture and make greater use of this valuable energy resource by supplying it into our gas pipelines.
Temporarily doubling gasoline supply in Uzbekistan's exchange trading
In response to short-term restrictions imposed on gas filling compressor stations in certain regions of Uzbekistan due to the impact of a cold atmospheric front, the volume of gasoline offered on exchange trading will temporarily double. Necessary reserves have been established across all regions to ensure an uninterrupted supply. There is also potential to further increase the gasoline volume on the exchange, depending on market demand and supply dynamics.
Exporting lubricants to Portugal
Saneg Oil Italy (the European lubricant operator of Uzbekistan's Saneg Oil and Gas Company) started exporting lubricants to Portugal. The partnership began with the delivery of 27 tons of motor oils, industrial oils, and greases to the Portuguese Lubrifuel distributor. Lubrifuel, a prominent supplier of products from leading European brands, is set to strengthen Saneg's market presence in Portugal.
Outlining priority tasks for 2025
The key directions include implementing joint projects with foreign companies, drilling new operational wells, and repairing existing ones using modern technologies. To stabilize gas production volumes and enhance industry efficiency, the company plans to intensify geological exploration. Detailed surveys will begin at 15 promising sites, and seismic exploration will cover an expanded area of 6,500 square kilometers. In 2025, a program for geological development and the exploration of new fields, developed with international experts, will also be launched. Uzbekneftegaz will continue its transformation to reduce production costs, improve its international credit rating, and attract foreign investments to finance new projects.
