Uzbekistan To Boost Gas Exports

by Nathan Hamm on 5/16/2006 · 6 comments

Uzbekneftegaz claims that it will boost natural gas exports by 1 billion cubic meters this year. It’s not coming from new production, so where will the state gas and oil company get it?

In the meantime, Tashkent’s plans cannot be ascribed to discovery of any new gas fields or improved production. Majitov says that the export will be increased at the cost of domestic consumption reduction.

Majitov said last September that gas export would be increased on the basis of the already existing gas fields before 2007 and on the basis of new ones in Ust-Yurt only after 2010.

Winter is a long way off, so I guess it makes sense for this to be announced now, rather than when the pipes are empty. (Even though that in the grand scheme of things, the reduced domestic consumption is not an enormous percentage of recent years’ production. The “we had to cut back our use so we could sell gas abroad” argument just doesn’t have that much resonance.)

Russia will be buying the increased production. It also will be buying additional cotton and perhaps even extractive industries and factories from Uzbekistan.

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Nathan is the founder and Principal Analyst for Registan, which he launched in 2003. He was a Peace Corps Volunteer in Uzbekistan 2000-2001 and received his MA in Central Asian Studies from the University of Washington in 2007. Since 2007, he has worked full-time as an analyst, consulting with private and government clients on Central Asian affairs, specializing in how socio-cultural and political factors shape risks and opportunities and how organizations can adjust their strategic and operational plans to account for these variables. More information on Registan's services can be found here, and Nathan can be contacted via Twitter or email.

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Brian May 17, 2006 at 10:24 am

Well, if domestic gas consumption is increasing year-over-year, which it has been on average the past few years, then a 1 billion cm cut of gas may be sigificant. I found data on 2 years of domestic gas use in Uzbekistan:
45.2 billion cm (2001)
49.3 billion cm (2004)

So that’s an increase of over 1 billion cm of gas use per year, on average – so a 1 billion cm cut may be significant. But I think it has a lot to do with the weather as well (apparently gas use peaked in 2002 and went down).

In any case, as typical with soviet-style central planning, it’s silly to set artificial targets of how much gas the country will export for the following year – and then to force the nation to follow through with it by potentially cutting off supplies.

Chirol May 18, 2006 at 3:16 am

This reminds me of the situation in Tanzania, where on Lake Victoria, tons of fish are exported every week while nearby much of the population is starving. But hey, Europeans will pay more for exotic fish than poor Africans so off they go. Do you see this as creating significant domestic unrest when winter hits?

Nathan May 18, 2006 at 9:01 am

Significant? Probably not. If I recall correctly, the shutoffs seem to usually be in rural areas rather than cities. There have been minor protests in recent years, but I don’t see them getting too big.

Laurence May 18, 2006 at 11:18 am

Our gas was shutoff in Winter 2002-3 in our apartment in Tashkent’s Center-1. The UWED classrooms were freezing, everyone in coats and scarves. One day I brought in an electric heater just so I could make it through a lecture…eventually, I bought an electric heater, which helped a little.

Dolkun May 19, 2006 at 1:15 am

… and last winter the rayon khokimyat apparently warned residents they’d be shutting off gas to the region where both the international school and clinic are located. It eventually didn’t happen, but this may be a slight sign that if there were a cold enough winter, not enough gas, or some unknowable reason, Tashkent could also experience cut-offs.

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