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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.

Gas Industry

Turkmenistan and CNPC Sign Deal on New Phase of Galkynysh Gas Field Development

Turkmenistan has signed a new agreement with China National Petroleum Corporation (CNPC) to advance the fourth phase of development at the Galkynysh gas field, one of the largest gas deposits in the world. According to the state news agency TDH, CNPC will design and construct production facilities on a turnkey basis, including gas wells and infrastructure capable of processing up to 10 billion cubic meters of marketable gas annually. The agreement follows a presidential decree authorizing the state concern Turkmengaz to conclude a contract with CNPC’s subsidiary, CNPC Amudarya Petroleum Company Ltd. The document provides for the construction of gas treatment facilities and the drilling of a sufficient number of production wells to maintain the planned output level. According to reports by industry publication Nebit-Gaz, work on the fourth phase was expected to begin in early 2026. The overall development plan for the Galkynysh field is divided into seven phases. Information published on the Turkmengaz website, citing the international conference “Oil and Gas of Turkmenistan, 2025,” indicates that the first phase has already been completed and is operational. It includes three gas processing plants with a combined annual capacity of 30 billion cubic meters. Turkmenistan possesses the world’s fourth-largest proven reserves of natural gas, yet its export routes remain limited. The majority of gas exports, estimated at between 80% and 90%, are directed eastward through the Central Asia-China pipeline network, often referred to as the Turkmenistan-China corridor. This has resulted in a high degree of dependence on a single export destination. Efforts to diversify export routes have encountered persistent challenges. Proposed projects involving increased deliveries through Iran, trans-Caspian connections via Azerbaijan, or pipeline routes toward South Asia have been constrained by infrastructure limitations, financing issues, and geopolitical factors. Analysts also note that delays in engaging with initiatives such as the European Union’s Southern Gas Corridor in the early 2000s reduced opportunities to expand Turkmenistan’s export geography.

Energy Security

Central Asia Considers Single Gas Ring to Link Regional Energy Systems

A proposal to connect the five Central Asian capitals into a unified, synchronized gas network has generated widespread debate among regional energy experts following a major industry forum in Tashkent. The idea, referred to as the “Central Asia Gas Ring,” was introduced by Kazakh oil and gas analyst Askar Ismailov during the Central Asia Oil & Gas Forum in early November. An analysis of the proposal was later published by the Uzbek outlet Upl.uz, citing assessments from regional and international experts. The concept envisions physically linking the gas transportation systems of Uzbekistan, Kazakhstan, Turkmenistan, Kyrgyzstan, and Tajikistan into an integrated regional ring, modeled on the existing Central Asian Unified Power System, which already enables cross-border electricity coordination. According to Ismailov, natural gas should be seen not only as a tradable resource but as a strategic instrument for regional integration and energy security, especially in the context of growing geopolitical volatility. Experts cited by Upl.uz argue that a gas ring could help countries better manage seasonal fluctuations in demand and reduce the risk of widespread energy shortages. Recent winter blackouts, particularly in Uzbekistan, have heightened concerns about supply resilience. The proposed system could also ensure more stable gas flows to Kyrgyzstan and Tajikistan, which lack significant domestic hydrocarbon resources and frequently experience shortages. The initiative has attracted interest beyond Central Asia. Valérie Ducrot, head of the Global Gas Center, described the plan as a new model of energy cooperation that could attract international investment if the five participating states align their energy policies. Research groups such as SPIK and SpecialEurasia, also cited in the analysis, view the project as a potential cornerstone of regional infrastructure, aligning national interests around shared goals for stability and integration. Economic incentives vary across the region. For Turkmenistan, Uzbekistan, and Kazakhstan, the ring could provide enhanced flexibility in export routes and pricing mechanisms. For gas-dependent Kyrgyzstan and Tajikistan, the proposal promises greater energy security, seen as essential for long-term economic and social development. External stakeholders, including China and the European Union, are expected to show interest in financing the project, while Russia is likely to seek continued influence over pricing structures and logistics. Ismailov estimates the total cost at between $4 billion and $5 billion, with most of the funding needed for modernization of aging Soviet-era pipelines and construction of select new infrastructure segments. While Upl.uz notes that technical and political hurdles remain, the proposal highlights growing momentum toward collective energy solutions in Central Asia.

Energy deficit

Alisher Sultanov Leaves Office After a Decade of Declining Gas Production in Uzbekistan

Alisher Sultanov was relieved of his post as presidential representative on energy security on December 16, ending some ten years of dubious performance as one of Uzbekistan’s top energy officials. Under Sultanov’s watch as head of the state oil and gas company and then as a top official in Uzbekistan’s Energy Ministry, the country’s oil and gas production decreased, and Uzbekistan went from being a gas exporter to an importer. A Career in the Gas and Oil Sector Sultanov started working in Uzbekistan’s energy sector in the mid-1990s and gradually made his way through the ranks at the state oil and gas company Uzbekneftegaz. In 2015, Sultanov became Uzbekneftegaz’s chairman, serving in that position until 2018. In 2017, Sultanov was appointed Deputy Prime Minister in charge of the fuel, energy, and industrial sector, and in February 2019, he was named Energy Minister. He stepped down as Energy Minister in April 2022, officially for health reasons, but by 2023 was back as presidential advisor on oil and gas, chemical, and energy matters, though that title was changed in July 2025 to the president’s representative on energy security. Stagnation and Decline Uzbekistan does not have large oil reserves. BP’s Statistical Review of World Energy has continually put Uzbekistan’s oil reserves at somewhere around 600-620 million barrels. Uzbekistan does have significant natural gas reserves of at least some 1.1 trillion cubic meters, however, according to the BP Statistical Review of World Energy. The country has been working with international partners to explore for new deposits, particularly in areas of the recently dried out Aral Sea. In 2011, Uzbekistan’s average oil production was some 80,000 barrels per day (bpd), and gas production for that year was some 56.6 billion cubic meters (bcm). Uzbekistan was still sourcing from many fields that had been producing since Uzbekistan was a Soviet republic, and it was not surprising that yields from these depleted fields started decreasing after 2011. Sultanov became head of Uzbekneftegaz in August 2015, and that year, oil production had already dropped to some 60,000 bpd and gas to some 53.6 bcm. Both fluctuated only a little over the next three years, ending 2018 at an average of 64,000 bpd and 58.3 bcm. The 2018 figure for gas was the peak production year of the 2011-2020 period, though it fell well short of the 66 bcm Uzbekneftegaz was predicting for 2018. After Sultanov was named Energy Minister in 2019, the figure for gas production fell significantly. In 2019, gas production was 57.5 bcm, but in 2020, only 47.1 bcm, though oil output held steady at 67,000 bpd and 61,000 bpd, respectively. Gas production increased slightly in 2021 to 50.9 bcm, but then dropped to 48.9 bcm in 2022. The decrease continued after Sultanov stepped down as Energy Minister in April 2022, plummeting to 44.2 bcm in 2023 and 42.2 bcm in 2024. With a rapidly growing population and expanding industrial sector, Uzbekistan’s domestic gas consumption was sharply increasing, rising from 43.6 bcm in 2020 to 54.6...

Natural gas

Outdated Infrastructure Threatens Central Asia’s Energy Security

Central Asia’s natural gas sector is facing mounting pressure as population growth and rising consumption outpace production, SpecialEurasia reports. The region’s population now exceeds 70 million, with annual growth rates surpassing 2% in many republics. Kazakhstan, Uzbekistan, and Turkmenistan together account for more than 95% of Central Asia’s gas reserves. Combined, they hold approximately 3.5 trillion cubic meters (tcm) of proven reserves. Turkmenistan alone possesses an estimated 17 tcm, giving it the world’s fourth-largest proven gas reserves outside the Middle East and Russia. Despite these substantial reserves, aging infrastructure and insufficient investment continue to hamper production capacity. Kazakhstan produces around 59 billion cubic meters (bcm) of gas annually, Uzbekistan 45 bcm, and Turkmenistan 81 bcm. However, surging domestic demand has outstripped supply, compelling Kazakhstan and Uzbekistan to import gas from Russia, a dependency that dates back to the 1990s but is becoming increasingly fraught amid current geopolitical tensions. Much of the region’s pipeline infrastructure remains from the Soviet era and lacks the capacity to meet contemporary needs, according to SpecialEurasia. Turkmenistan remains heavily reliant on a single pipeline route to Russia, while Kazakhstan and Uzbekistan depend on Russian energy giants Gazprom and Rosneft for imports and infrastructure maintenance. Efforts to diversify export routes beyond Russia have encountered difficulties due to limited infrastructure and geopolitical uncertainty. China has emerged as a dominant player in the region, funding pipeline and transportation projects through the Belt and Road Initiative. These investments have enhanced connectivity with Chinese markets but have also increased Central Asia’s economic dependence on Beijing. Meanwhile, the European Union has advocated for green energy and digitization, though its financial commitments remain modest compared to those of Russia and China. Iran is positioning itself as a potential transit corridor, offering Central Asia access to seaports. However, international sanctions and persistent geopolitical tensions continue to limit broader cooperation. Russia’s invasion of Ukraine has further strained Moscow’s regional relationships, diminishing its capacity to provide the kind of support it once did. Central Asian governments now face the challenge of maintaining a strategic balance among Russia, China, and Western powers to ensure both economic resilience and political autonomy. SpecialEurasia concludes that without substantial investment in infrastructure, greater economic diversification, and a more balanced approach to foreign partnerships, Central Asia will remain vulnerable despite its abundant natural gas resources.

Energy deficit

Central Asia Faces Growing Energy Deficit

Central Asia is heading toward a serious energy crunch. According to the Logistan.info portal, regional demand for imported natural gas is expected to reach 25 billion cubic meters annually by 2030. This looming shortfall is driven by rapid population growth, around one million people per year, industrial expansion, declining domestic production, and the deteriorating state of aging infrastructure. Recent accidents in Bishkek, Tashkent, Dushanbe, and Ekibastuz illustrate the scale and urgency of the problem. Kazakhstan: Rising Output, Falling Exports Kazakhstan produced 59.2 billion cubic meters of gas in 2024, representing a 6.4% increase from the previous year. However, nearly half of this was reinjected into oil reservoirs to sustain production. Only 29 billion cubic meters were available for domestic consumption. Soaring internal demand has already led to a sharp decline in exports to China, which fell 40% to 8.7 billion cubic meters. Uzbekistan: From Exporter to Importer Uzbekistan's situation is even more precarious. In 2024, the country produced 44.6 billion cubic meters of gas and 713,400 tons of oil, figures that are in decline, dropping 4.5% and 8.5% respectively. To cover the shortfall, Tashkent has turned to Russia and Turkmenistan, purchasing $1.7 billion worth of gas. Uzbekneftegaz expects to produce just 26.5 billion cubic meters of commercial gas in 2025, far short of projected domestic needs. Kyrgyzstan, Tajikistan, and Turkmenistan Kyrgyzstan and Tajikistan produce virtually no hydrocarbons and rely entirely on imports of these resources. Meanwhile, demand continues to grow in tandem with their populations, and domestic energy generation falls short of even basic consumption needs. Turkmenistan remains the region’s top gas exporter, sending 41.3 billion cubic meters abroad in 2024. However, Ashgabat’s ability to increase exports is limited by its own growing domestic consumption, binding long-term contracts with China, and a lack of large-scale infrastructure development. Investment, Delays, and Structural Challenges While Central Asian governments have announced plans for new hydroelectric plants, combined heat and power stations, and nuclear power facilities, tangible progress remains slow. Kazakhstan, Kyrgyzstan, and Uzbekistan have yet to break ground on any of their proposed nuclear power projects. Key obstacles include a shortage of qualified personnel, water scarcity, environmental concerns, and, above all, insufficient funding. Without substantial foreign investment, modernization efforts are likely to stall. To ease financial pressures, countries in the region have begun raising gas and electricity tariffs. These price hikes aim to offset upgrade costs but have provoked public backlash and fueled inflation. In Uzbekistan, for instance, inflation accelerated to 15% in May 2025, with energy prices cited as the primary driver. The Russian Option Forecasts for regional gas imports remain imprecise, but analysts estimate the need could rise to 20-25 billion cubic meters annually by 2030. Russia appears poised to become the main supplier, though details of supply agreements, including pricing, volumes, and terms, have not been disclosed. Central Asian governments are attempting to keep cooperation with Moscow strictly within the economic sphere, wary of entangling political dependencies. As a result, the region faces a dual challenge: securing energy stability through...