Features - The Times Of Central Asia

Viewing results 25 - 30 of 3483

Gas Industry

Kazakhstan Appoints Operator for Karachaganak Gas Processing Plant Construction

Kazakhstan has identified the participants in a project to construct a new gas processing plant (GPP) at the Karachaganak field, aimed at supplying the domestic market with commercial gas. The national company QazaqGaz will act as the single project operator, while China’s CITIC Construction has expressed readiness to participate. Initially, the launch of the GPP, with a capacity of up to 4 billion cubic meters of gas per year, was scheduled for 2028. Construction was to be carried out by Shell and Eni, both involved in developing the Karachaganak field in the West Kazakhstan region. However, in March 2026, Kazakhstan withdrew from this arrangement due to significant cost overruns and disagreements over implementation terms. At present, gas from Karachaganak is processed at the Orenburg GPP in Russia. Kazakhstan aims to relocate processing to its own territory to strengthen energy security and reduce dependence on external infrastructure, particularly amid periodic disruptions linked to drone attacks. According to current plans, the capacity of the future plant may be increased to 5 billion cubic meters per year. The project is a key element of Kazakhstan’s Comprehensive Gas Industry Development Plan through 2029 and is being implemented on the instructions of President Kassym-Jomart Tokayev. Minister of Energy Yerlan Akkenzhenov confirmed that the selection of QazaqGaz as the single operator is driven by the need to move quickly to the implementation stage and by the company’s experience in managing gas infrastructure. The project’s economic feasibility has been confirmed, and a framework agreement outlining basic principles of cooperation has been signed with CITIC Construction. Preparations are currently underway for the FEED (Front-End Engineering Design) stage, while issues related to land allocation, infrastructure, and feedstock supply are also being addressed. Particular attention is being paid to negotiations with foreign shareholders in the Karachaganak project. Key issues include guaranteed supplies of raw gas, establishing a pricing mechanism that ensures domestic market viability, integrating the plant with existing field infrastructure (brownfield), and resolving the gas evacuation fee mechanism. “For Kazakhstan, this plant is of critical importance, and indefinitely postponing the project’s start is unacceptable. The state needs results. The project must be implemented dynamically and in strict accordance with our national economic interests,” Akkenzhenov said. The project is unfolding against the backdrop of legal disputes between Kazakhstan and international energy companies. As previously reported by The Times of Central Asia, Shell and Eni may ultimately be required to pay the Kazakh government between $2 billion and $4 billion following international arbitration proceedings in London. In addition, similar disputes are ongoing over another major project, the Kashagan field, where proceedings are being considered at the International Centre for Settlement of Investment Disputes in Washington.

Hungary

Hungary’s Political Shift Puts Central Asia Partnerships Under Scrutiny

Hungary’s political transition following the defeat of Viktor Orbán’s party and his resignation as prime minister is drawing attention not only in the EU and the United States, but also in Central Asia, where Budapest has built growing energy and investment ties. The key question is whether the policy of cooperation with Central Asia developed under Orbán will continue under the new leadership. In recent years, under Orbán, Budapest has actively developed its Central Asian foreign policy, primarily driven by the desire to find alternatives to Russian energy supplies. That push reflects Hungary’s long-standing reliance on Russian oil and gas, which has shaped its search for alternative suppliers beyond Europe. Resource-rich Kazakhstan, Uzbekistan, and Turkmenistan became natural partners for diplomatic engagement. Orbán succeeded in building trust-based relationships with the presidents of the Central Asian republics, grounded in what Hungary’s Minister of Foreign Affairs, Péter Szijjártó, described as “sincere friendship” in an interview with Uzbek media. “In Hungary, we have always viewed Central Asia as one of the fastest-growing regions in the world, with enormous potential. Our efforts to build these relations did not begin today, but decades ago,” he said. Hungary became the first Central European country to sign a strategic partnership with Kazakhstan in 2014. Currently, the Kazakhstan-Hungary Business Council is in operation, along with a joint agricultural direct investment fund. In 2024, bilateral trade approached $200 million, and from January to August 2025, it grew by another 22.1%, exceeding $164.6 million. Hungarian investments in Kazakhstan’s economy have surpassed $370 million, while the current investment portfolio includes 16 projects worth about $700 million in engineering, agriculture, and logistics. These links also intersect with wider efforts to expand east–west transport routes through the Caspian region, offering Hungary indirect access to Central Asian energy and trade flows. In May 2025, Uzbekistan’s President Shavkat Mirziyoyev held talks with Orbán in Budapest, where both sides highlighted rising trade volumes and a joint investment portfolio of about $500 million. Hungary’s OTP Bank entered into Uzbekistan’s financial market in 2023, acquiring a 73.71% stake in Ipoteka Bank, becoming its principal owner and the majority shareholder of the country’s fifth-largest bank. As early as 2019, Hungary had intensified cooperation with Turkmenistan. After talks at the Turkmen Foreign Ministry, Szijjártó told the media that Hungary views Turkmenistan as an important country from the perspective of European security. “We very much hope that Turkmenistan’s gas resources will be integrated into the overall energy flow of Central Europe,” he said. However, uncertainty remains over whether this policy direction will continue under Orbán’s successor, Péter Magyar. Oil and gas analyst Oleg Chervinsky has suggested that political changes in Hungary could affect cooperation with Kazakhstan’s national company KazMunayGas (KMG). Chervinsky notes that, having secured a constitutional majority in parliament, Magyar has a mandate to “implement reforms in both foreign and domestic policy [which could] reshape the constitutional structure of the right-wing populist authoritarian system built around Orbán.” The analyst points to Hungary’s oil and gas company MOL Group, which in recent...

Strategic Partnership

The Astana-Tashkent Tandem: A Developing Partnership Based on Mutual Interest

On April 11, Kazakhstan’s President Kassym-Jomart Tokayev paid a working visit to Uzbekistan, where he was hosted in Bukhara by President Shavkat Mirziyoyev. The historic city provided the setting for discussions that increasingly reflect a broader regional agenda. A second informal meeting in just over a year suggests this format may be gaining weight in relations between Central Asia’s two largest economies. “The informal format is of strategic importance, since such meetings make it possible to discuss sensitive issues without protocol constraints, build personal trust between leaders, which plays a key role in Central Asia, and align positions ahead of official negotiations,” said Uzbek political analyst Ravshan Nazarov. He added that such meetings reflect a growing intra-regional focus, reduced dependence on external actors, and the strengthening of the “Tashkent-Astana” tandem. During the talks, Tokayev emphasized the importance of the visit “given the current unstable geopolitical situation.” The two sides reviewed bilateral cooperation across multiple sectors. Trade turnover reached $5 billion last year, with both countries aiming to double this figure to $10 billion in the near term. Joint projects are already underway in automotive manufacturing, infrastructure, logistics, electrical engineering, and construction materials. The discussion also extended to other sectors, including energy and industrial cooperation. Both Presidents stressed the need to modernize border infrastructure, eliminate bottlenecks, and develop efficient transport corridors to external markets. They also discussed accelerating major regional projects, including the construction of the Kambarata hydropower plant and advancing “green” energy exports. Tokayev also voiced his support for Uzbekistan’s “Clean Air” initiative, highlighting environmental challenges in Almaty. “I share your concern regarding the environmental condition of Tashkent. We have a very difficult situation in Almaty. Unfortunately, Almaty has entered the list of the most polluted major cities in the world, and urgent measures must be taken. Therefore, we could propose the joint implementation of the ‘Clean Air’ initiative under presidential patronage,” Tokayev said. The reference to Almaty also recalled the setting of the previous informal meeting on March 29, 2025. During that visit, Mirziyoyev toured the Medeu high-mountain sports complex and visited the National Museum of Arts, where an exhibition featuring works by Abilkhan Kasteev and Ural Tansykbayev was organized. That visit drew attention to the city’s preparedness for high-level events. Tokayev subsequently instructed then-Mayor of Almaty, Yerbolat Dossayev, to improve conditions in the city and report regularly on progress. In May 2025, Dossayev was dismissed as mayor and reassigned to the Presidential Administration. He was later also relieved of that post. In contrast, the Bukhara program was more extensive. Mirziyoyev presented industrial and technological projects, including a cotton-textile cluster, an artificial intelligence hackathon, and several cultural landmarks, including the mausoleum of Bahauddin Naqshbandi, founder of the Naqshbandi Sufi order. The discussions themselves also appeared more substantive, covering areas such as rare earth metals, transport, energy, and information technology. “When discussions include not only trade but also rare earths, transport, energy, and IT, it indicates a shift toward strategic thinking. The focus is no longer just on trade turnover,...

Digital Tenge

Digital Tenge: Kazakhstan Becomes a Testing Ground for Programmable Money

While developed economies from the Federal Reserve to the European Central Bank, continue to debate the risks of introducing central bank digital currencies (CBDCs), Kazakhstan has already moved into large-scale commercial deployment. By early 2026, the volume of the digital tenge in circulation had reached 336.6 billion KZT (about $700 million), positioning Central Asia as a significant testing ground for programmable money for international investors and the global fintech community. The digital tenge is already being used in tax administration, subsidy distribution, and other state-backed financial operations, extending its role beyond a purely technical innovation. This is not merely a technological upgrade of the financial system, but a fundamental shift in the interaction between the state, business, and capital. Algorithms Instead of Bureaucrats For international businesses and investors, bureaucracy has long been a major barrier in emerging markets, often freezing liquidity for extended periods. The introduction of the digital tenge aims to address this by enabling faster transactions through smart contracts. One of the most notable pilot cases in 2025-2026 was the implementation of a “digital VAT” mechanism. Traditionally, exporters waited up to 90 days for value-added tax refunds, often relying on short-term borrowing to bridge cash flow gaps. With the integration of the digital tenge into tax administration, the VAT refund period has been reduced to five business days. A smart contract analyzes the digital supply chain and, if no discrepancies are identified, initiates payment automatically without the involvement of tax officials. For multinational companies, improved liquidity enhances Kazakhstan’s attractiveness as a manufacturing destination. Similar mechanisms have also been introduced for distributing government business subsidies through development institutions. Financial Bridge: The Digital Silk Road Bypassing SWIFT The current international money transfer system remains relatively slow and costly, as transactions pass through multiple intermediary banks, each charging fees. Under sanctions pressure, such transfers may also carry additional risks. In this context, the role of the digital tenge extends beyond the domestic market. Kazakhstan is positioning its CBDC as a tool that could reshape the architecture of Eurasian trade. Research by the Bank for International Settlements suggests that digital currencies can significantly accelerate cross-border payments. Given Kazakhstan’s substantial trade with China, which is advancing its digital yuan (e-CNY), the creation of direct digital payment corridors between the two countries appears increasingly plausible. For global markets, this could enable near-instant, round-the-clock settlements between Asia and Europe, reducing reliance on traditional systems such as SWIFT. Kazakhstan is thus seeking to position itself as an emerging digital financial hub, with the potential to lower transaction costs and mitigate certain external risks. The Flip Side of the Digital Coin One of the most debated aspects of Kazakhstan’s digital currency initiative is the level of transparency enabled by “coloring” (or marking) technology. This system allows authorities to track how funds are used and ensure they are spent for their intended purpose. If budget funds are allocated for infrastructure or agricultural equipment, their use can be limited accordingly. At the macroeconomic level, this could help reduce Kazakhstan’s...

Iran

Central Asia Recalculates as the Iran War Enters a New Phase

Central Asia’s first response to the Iran war was public and urgent. Governments organized evacuations, welcomed a ceasefire, and watched the Strait of Hormuz because the region’s trade routes, fuel costs, and food prices were already under pressure. The next phase looks different. Following the April 12 collapse of U.S.-Iran talks in Islamabad, Washington moved to block maritime traffic entering and leaving Iranian ports. That step does not formally close Hormuz to all shipping, but it pushes the crisis into a more serious phase for any country or company still treating Iran as a viable corridor. That distinction is important in Central Asia because the region does not need a formal legal closure of Hormuz to feel the shock. It only needs insurers, banks, freight forwarders, airlines, and traders to decide that the southern option has become too risky for routine planning. That process was already underway. The route through Iran had come under strain in southern corridor traffic, food systems, and in the wider pricing of regional connectivity. A U.S. move against Iranian ports is likely to reinforce that view. Official statements across Central Asia still reflect the ceasefire moment more than the latest escalation. On April 8, Kazakhstan’s President Kassym-Jomart Tokayev welcomed the truce and said he hoped it would support global trade and prosperity. Kyrgyzstan’s Foreign Ministry also welcomed the ceasefire and praised efforts to reduce tensions. Uzbekistan’s Foreign Ministry did the same, calling the truce an “important step toward de-escalating tensions,” and stressing that it should serve as a pathway to a broader political settlement. Tajikistan’s Foreign Ministry also welcomed the ceasefire agreement between Iran and the United States. Turkmenistan, meanwhile, had already taken a practical line, saying on March 4 that it was keeping all international checkpoints open and providing passage for foreign citizens, vehicles, and rail stock across the Turkmen-Iranian border. Since then, public messaging has lagged behind the latest escalation. By April 13, Qazinform’s foreign news flow had shifted to the failed Islamabad talks and Trump’s blockade order, while the latest publicly visible official positions elsewhere in the region still reflected the April 8 ceasefire. That does not mean backchannel diplomacy has stopped, but it does suggest that Central Asian governments prefer caution in public as the conflict shifts from direct strikes to pressure on shipping and trade. For the region, the economic logic is now clearer than the politics. Approximately 20% of global oil supplies and one-third of global fertilizer trade move through the Strait of Hormuz, while urea prices surged by almost 46% between February and March 2026. The World Bank’s April Europe and Central Asia Economic Update said growth in the developing economies of Europe and Central Asia is expected to slow to 2.1% in 2026, down from 2.6% in 2025, as the Middle East conflict, wider geopolitical tension, and trade fragmentation weigh on the region. Those pressures were already significant. The collapse of the main post-ceasefire diplomatic effort, followed by oil rising back above $100 a barrel, has made them harder...

Middle Corridor

Kazakhstan and Azerbaijan Are Reinforcing the Middle Corridor’s South Caucasus Link

On April 7 Kazakhstan’s Foreign Minister Yermek Kosherbayev visited Tbilisi to hold talks with Georgian Foreign Minister Maka Bochorishvili and sign a 2026–2027 foreign-ministry cooperation program. He called Georgia “a key link” in the Europe–Asia transport architecture and said the common task was to raise corridor capacity, improve service predictability, and ensure tariff transparency. The materialization of the bilateral cooperation is already evident from last June’s opening of the Poti multimodal terminal by a joint Kazakhstani-Georgian company. The real meaning of Kosherbayev's discussions in Tbilisi lies in their context. On April 2 in Baku, Prime Minister Olzhas Bektenov said Kazakhstan plans an intergovernmental agreement with Azerbaijan this year to strengthen the status of the Middle Corridor (also known as the Trans-Caspian International Transport Corridor, TITR), and he proposed moving quickly on the Digital Monitoring Center under the Organization of Turkic States (OTS). On April 6 in Tbilisi, Azerbaijani President Ilham Aliyev called the Azerbaijan–Georgia segment the corridor’s “main transport artery.” Then on April 8 in Baku, Aliyev received Kosherbayev together with Kazakhstan’s transport minister. The official readout ranged from the Middle Corridor to joint investment, green-energy, and fiber-optic projects. Kosherbayev’s April 7 stop in Tbilisi thus belongs to a short Kazakhstan-led diplomatic run across the corridor’s western nodes. Kazakhstan and Azerbaijan Tighten the Corridor Kazakhstan’s early-April engagement in the South Caucasus rests on its eastward-looking framework with China. Two China–Kazakhstan documents were already in evidence in October 2023: a Memorandum of Understanding (MoU) on deepening the development of the China-Europe Railway Trans-Caspian route, and an intergovernmental agreement on developing that route. China’s National Development and Reform Commission (NDRC) subsequently clarified that the agreement focused on stronger transit organization, fewer administrative barriers, and improved logistics and transport operations. In July 2024, Kazakhstan’s President Kassym-Jomart Tokayev and his Chinese counterpart Xi Jinping jointly attended the opening of the Trans-Caspian direct fast transport service; NDRC then recorded a work mechanism with Kazakhstan’s transport ministry to carry that cooperation forward. On January 1, the first Trans-Caspian train of 2026 departed Xi’an for Baku carrying 45 containers of photovoltaic equipment. Chinese reports assert that the route had accumulated 466 runs by the end of November 2025, moved onto a weekly six-outbound and three-inbound timetable, and cut travel times from the roughly 20-day average recorded in 2025 to a standard 15 days, with the fastest runs taking 11 days. On April 3, it was also reported that there were 85 Xi’an Trans-Caspian trains in the first quarter of 2026, up 150% year-on-year, while the Kazakhstan–Xi’an terminal in Almaty handled more than 6,000 containers in that quarter alone, a 60% increase from a year earlier. A separate quasi-official Chinese trade-services portal reported that Trans-Caspian trains had reached daily service and that 371 such trains had run in January–October 2025, up 33%. China’s NDRC also said in late 2025 that Aktau and Baku should be strengthened as hub nodes in this corridor system. Azerbaijan is the indispensable partner without which the route’s western logic does not function. Bektenov’s...