Azerbaijan to help improve energy saving in Uzbek oil and gas sector

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TASHKENT (TCA) — Azerbaijan’s state energy company SOCAR and Uzbekistan’s national oil and gas company Uzbekneftegaz plan to establish a joint venture to introduce energy-saving technologies to the Uzbek oil and gas industry during the first six months of 2016, AzerNews reported.

SOCAR and Uzbekneftegaz signed a memorandum of intent late in 2015, according to a representative of the Neftegazinvest company, a subsidiary of Uzbekneftegaz.

SOCAR will initially conduct a comprehensive energy audit of Uzbekneftegaz’s enterprises, after which the parties will determine the project’s parameters.

The source said that the founding documents of the joint venture would be signed in the summer of 2016.

Uzbekneftegaz plans to spend up to $500 million to finance the energy-saving technologies by 2030. The energy saving potential is estimated at 2.5 billion cubic meters of natural gas per year once these technologies are introduced.

It was earlier reported that in recent years, enterprises of Uzbekistan’s energy, oil and gas, mining, metallurgical, chemical, and coal industries have taken measures aimed at reducing energy intensity and introducing energy efficient technology, which has saved 770 million kWh of electricity and 570 million cubic meters of natural gas, according to the country’s Economy Ministry.  

The country now plans 36 projects aimed at saving 352 million kWh of electricity and 127 million cubic meters of natural gas per year.

Uzbekistan is one of the most energy intensive countries in the world, meaning that improvements in efficiency can have large economic benefits, according to the World Bank. Outdated equipment and technology throughout the country results in more than 60% of the primary energy mobilized to provide energy services being lost in processing and delivery systems. Gas flaring is also a pervasive problem in Uzbekistan – resulting in losses of $500 million (3% of GDP) in 2011.

Recent data shows that investments in energy efficiency of $170 million over the next 10 years can result in a 15% reduction in Uzbekistan’s industrial electricity consumption by 2022. This latest round of investment brings Uzbekistan much closer to this investment goal and is expected to have impressive impacts by 2018 – including energy savings of more than 200,000 MWhs and reductions in the country’s CO2 emissions of as much as 400,000 tons, the World Bank said.

Sergey Kwan

TCA