Energy Security - The Times Of Central Asia

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Kazakhstan, Italy, and the Battle for Europe’s Energy Future

ASTANA - Central Asia is no longer on the periphery of global events, but a place where major countries come together with their ideas, money, and projects. In a turbulent and highly uncertain geopolitical environment, global powers are seeking to establish their presence in this strategic, energy-rich region. Italy is no exception. Italian Prime Minister Giorgia Meloni was initially scheduled to visit Kazakhstan in late April, but in light of Pope Francis' passing her trip to Astana was canceled. Coincidently or not, she came to the Kazakh capital on May 30 to attend the Astana International Forum (AIF) – a two-day event that saw the attendance of political, business, and thought leaders who gathered under an expanded agenda that included climate change, energy security, and sustainability. Meloni’s visit to Kazakhstan is part of her Central Asian tour; she previously visited Uzbekistan, where she met with the country’s President Shavkat Mirziyoyev. In Astana, she not only spoke at the AIF, emphasizing that the “Astana International Forum has become increasingly important in dialogue worldwide,” but also took part in the first-ever Central Asia–Italy summit. “Italy was the first Nation in the EU to decide to invest in relations with Central Asia and its individual member Nations, launching a permanent format in order to share ideas,” Meloni said at the AIF, emphasizing that the EU–Central Asia Summit, held in April in Samarkand, “elevated the relations between the region and the European Union to a strategic partnership.” In this relationship, Kazakhstan seems to play a crucial role. Italy is the largest Central Asian economy’s number one trading partner in Europe. According to Kazakhstan’s Ministry of Trade and Integration, trade turnover between Kazakhstan and Italy in 2024 amounted to $19.9 billion, which is 24% higher compared to the previous year ($16.1 billion). Oil is undoubtedly Kazakhstan’s main export to Italy, although critics argue that the third-most populous EU member is merely a transit country, as large amounts of Kazakh oil ultimately reach other European countries. “If we really want to shape the future, we must have the courage to look beyond our geographical boundaries and pave new paths. I am thinking of the energy sector, where our cooperation can help make a difference, and I am also referring to critical raw materials, where our collaboration aims to generate shared benefits and mutual opportunities,” Meloni stressed. Kazakhstan is one of the richest countries in the world in terms of natural resources. This makes it a nation of significant interest to Italy – with whom Astana signed a Strategic Partnership Agreement back in 2009 – as well as to other European states. But from the Kazakh perspective, it is important that this cooperation be mutually beneficial. Astana is seeking to avoid being seen merely as a source of raw materials and expects its partners to offer tangible benefits in return. That is why Kazakhstan’s President Tokayev has pushed forcefully for the renegotiation of oil agreements with foreign energy companies operating in the country. For Astana, it is...

Tokayev Moves to Reclaim Kazakhstan’s Energy Future

In January 2025, Kazakhstan’s President Kassym-Jomart Tokayev instructed the government to seek revisions to the nation’s production-sharing agreements (PSAs). The first known result of that directive has now surfaced, with the International Consortium of Investigative Journalists (ICIJ) publishing a report regarding a confidential interim ruling in an arbitration case. According to this information, Kazakhstan is pursuing a $160 billion claim against the North Caspian Operating Company (NCOC), the consortium managing the Kashagan oil field. The ruling states that after royalty payments, NCOC receives 98% of remaining revenue from Kashagan’s output. The document concerns a narrower environmental dispute, but the 98% figure alters the landscape. The contract in question dates to the 1990s, when Kazakhstan — newly independent, fiscally constrained, and eager for technical expertise — entered into deals that prioritized attracting investment over securing long-term national benefit. The government now argues that those historical constraints no longer apply, while the revenue-sharing terms remain effectively frozen in place. Rather than seek unilateral redress or executive override, Tokayev’s administration has turned to arbitration. The venue, the Permanent Court of Arbitration in The Hague, and the legal framing mark a continuation of Kazakhstan’s methodical approach to reasserting national interests in its domestic political economy. This latest move cannot be understood as an isolated decision. It reflects a trajectory of state behavior extending back three decades. In the early 1990s, when Chevron’s bid for Tengiz was effectively imposed as a condition for U.S. bilateral assistance, Kazakhstan lacked both the leverage and the institutional competence to resist — a dynamic I analyzed in detail at the time. Chevron’s refusal to direct more than a token amount of investment to social infrastructure nearly sank the agreement. A similar dynamic surrounded the financing and structuring of the Caspian Pipeline Consortium (CPC). Kazakhstan’s attempts to assert greater influence were often thwarted, not least by the asymmetry of legal expertise and negotiating experience. That imbalance began to shift by the early 2000s. The creation of KazMunaiGas (KMG) in 2002 consolidated the state's participation in the energy sector and enabled its strategic action to become more coordinated. By 2003, Kazakhstan was insisting on conformity with international accounting standards at Tengiz, not only to ensure transparency but also to block attempts by foreign operators to defer investment obligations. Environmental enforcement became more assertive as well, with fines imposed on Tengizchevroil for massive open-air sulfur storage, a practice that had long provoked public concern. The Kashagan field, discovered in the late 1990s and described as the largest oil find since Alaska’s Prudhoe Bay in 1968, became the focal point of these tensions. From the outset, Kazakhstan’s participation in the consortium was marginal. A restructuring of the consortium in the early 2000s brought KMG back in, but cost overruns and delays continued. By 2007, the government had suspended work at Kashagan, citing both ecological violations and spiraling expenditures, in a sequence of events I traced contemporaneously during the legislative and consortium restructuring that followed. Amendments to the Law on the Subsurface followed, granting...

Kyrgyz Prime Minister Kasymaliev in Washington for IMF, World Bank Meetings

Kyrgyz Prime Minister Adylbek Kasymaliev has arrived in Washington, D.C. to participate in the Spring Meetings of the International Monetary Fund (IMF) and World Bank Group. During his visit, Kasymaliev is expected to meet with senior World Bank officials to discuss ongoing and future investment projects in Kyrgyzstan. Following the IMF and World Bank sessions, Kasymaliev is scheduled to hold high-level talks with Anna Bjerde, the World Bank’s Managing Director for Operations, and Antonella Bassani, Vice President for Europe and Central Asia. A key item on the agenda will be the planned construction of the Kambarata-1 Hydropower Plant (HPP) on the Naryn River. The Kyrgyz government hopes to secure an interest-free loan of $500 million from the World Bank to support the project, which is estimated to cost $3.6 billion in total. Kambarata-1 is seen as a strategic initiative that could make Kyrgyzstan fully self-sufficient in electricity generation. To date, approximately 4 billion Kyrgyz soms (about $46 million) have been allocated from the state budget for preliminary construction works. These funds are being used to build vital infrastructure including roads, a transportation tunnel, a bridge over the Naryn River, power lines, and temporary housing for workers. In addition to his meetings with international financial institutions, Kasymaliev will also engage with executives from leading U.S. corporations. These discussions will not only cover the hydropower sector but will also highlight other government-led investment opportunities in Kyrgyzstan across various industries. The Kyrgyz leadership has intensified efforts to attract foreign partners for its infrastructure and energy projects, as part of a broader strategy to enhance economic independence and modernize the national energy grid.

Russia China Export/Import Oil and Gas Natural gas Energy Security EU

Gas Crunch in Uzbekistan: Industry Falters as Demand Surges

In the first two months of 2025, Uzbekistan's natural gas production declined by 4.2% compared to the same period in 2024, continuing a troubling trend that has seen output fall from 61.59 billion cubic meters in 2018 to 44.59 billion cubic meters in 2024. This persistent decrease raises concerns about the nation’s energy security and economic stability. Once among Central Asia’s energy success stories, Uzbekistan became a net importer of natural gas in 2023, a symbolic turning point for a country whose identity was long intertwined with hydrocarbon abundance. The extent of the strain was demonstrated in December 2024, when gas stations around the country were forced to close during a cold snap as heating systems across the country kicked into action. This led drivers of methane-powered cars, which are common in the country given that it costs about $15 to fill the tank as opposed to $40-50 in a gasoline-powered vehicle, into a desperate hunt for places to fill up. Kilometer-long queues formed, and drivers ferociously competed to be first to the pump. Such scenes have become a familiar sight in the Uzbek winter as gas production has fallen. “Uzbekistan’s gas production is already quite mature,” Anne-Sophie Corbeau of Columbia University’s Center on Global Energy Policy told The Times of Central Asia. “The existing fields are entering a phase of decline. The reserve-to-production ratio was around 18 years based on 2020 data, and the situation is unlikely to be much better now.” Put simply, the country is running out of easy gas. Despite repeated efforts to locate new reserves, particularly in the under-explored Ustyurt region, exploration has so far failed to yield significant breakthroughs. Even if discoveries are made, the timeline to bring new fields online would mean little impact before 2030, at best. In parallel, demand for gas has remained stubbornly high. Corbeau noted that “the country’s energy mix and electricity generation are very dependent on natural gas. And Uzbekistan is one of the countries with the lowest wholesale gas prices in the world.” Those prices have long distorted both domestic consumption and investor interest, keeping demand high while choking off potential upstream capital. [caption id="attachment_30630" align="aligncenter" width="1209"] Image: Wholesale Gas Price Survey 2024 Edition. International Gas Union. https://www.datocms-assets.com/[/caption] This sentiment is echoed by Irina Mironova, Senior Energy Analyst at the New Energy Advancement Hub. “Domestic production is declining faster than consumption,” she said, “and domestic gas pricing is not market-based. It remains below the price of imported gas, which undermines the investment appeal of upstream projects for foreign investors.” The government has undertaken some measures to control demand over the past year, raising the tariffs for electricity and gas by 52.5% and 71% respectively, hitting consumers in the pocket in an attempt to alter the wasteful use of scant resources. On the supply side, the government has declared a bold ambition to raise production to 62 billion cubic meters annually under its Uzbekistan–2030 development strategy, but observers remain skeptical. “They’ve tried to facilitate exploration, especially in the...

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Uzbekistan Looks to Nuclear Power for Energy Security

Uzbekistan is moving forward with plans to build its first nuclear power plant, a project that officials say is critical to the country’s long-term energy security. In an interview with the Alter Ego YouTube project, Azim Akhmadkhodjaev, head of Uzbekistan’s Atomic Energy Agency, argued that nuclear power is the only viable alternative to continued reliance on imported fossil fuels. “Let’s continue to import high-calorie coal, burn it, and poison our environment. Let's import tens of billions of cubic meters of gas and spend money on it. Or we can build a few nuclear power plants, reduce the cost of electricity, and become energy independent. Will we achieve energy independence? Undoubtedly, yes,” Akhmadkhodjaev said. A Strategic Partnership with Global Players The nuclear power project is being developed with Russian technical support, but Akhmadkhodjaev emphasized that this does not compromise Uzbekistan’s sovereignty. The plant will be fully owned and operated by Uzbekistan, with local specialists overseeing daily operations. “The nuclear island will be Russian because this technology is the most reliable and proven. However, the automated control system will be based on European technology, and the turbine equipment will be made in Europe or China,” he explained. In addition to Russian expertise, Uzbekistan is engaging with several French companies. Negotiations are ongoing with Assystem for technical support, Bureau Veritas for training specialists, and Framatome for managing key technical aspects of the project. Balancing Energy Sources While pursuing nuclear energy, Uzbekistan is also working to boost the share of renewables in its energy mix, from 16% today to 54% by 2030. Energy analysts say that a diversified portfolio, combining nuclear and renewable sources, will help the country meet its energy needs while minimizing environmental harm.

Uzbekistan Seeks International Collaboration for Nuclear Energy Project

President Shavkat Mirziyoyev held a meeting on February 10 to review progress in Uzbekistan’s nuclear energy sector and outline future goals. Officials reported that 25 gigawatts of renewable energy capacity will be added over the next five years, generating 64 billion kilowatt-hours of green energy annually. By 2030, the country aims to increase the share of renewable energy to more than 50% of total electricity production. Azim Ahmadkhodjayev, director of Uzatom, discussed the sector’s prospects in an interview with Uzbekiston 24 TV following the meeting. He noted that by 2040, the share of nuclear energy in global electricity production could rise from 9% to 25%. He also recalled that Uzbekistan signed an agreement last year with Rosatom to build a 330 MW small-scale nuclear power plant in Jizzakh. “Our president emphasized that this project should have an international character, with the involvement of various international organizations,” he said. In addition to Russian technologies, the project will integrate Chinese non-nuclear technologies and European software and hardware. “To implement this project, we will create an international consortium using the most advanced technologies,” Ahmadkhodjayev added. To reduce water consumption, the project may incorporate dry coolers from Hungarian or Chinese manufacturers. Uzatom has also developed a cooperation program with the International Atomic Energy Agency (IAEA) to train specialists and ensure safety in nuclear energy projects. Ahmadkhodjayev noted that the president has instructed officials to explore alternative approaches for similar projects in the future.