Oil and Gas - The Times Of Central Asia

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Uzbekistan to Start Industrial Production of Hydrogen

Sanoat Energetika Guruhi (Saneg), one of the largest private oil and gas companies in Uzbekistan, announced on August 21 that the Ferghana Oil Refinery is to produce industrial hydrogen by transferring its related assets to Air Products, a world-leading industrial gases company. The Ferghana Refinery is currently undergoing comprehensive modernization to both enhance its output and help the government of Uzbekistan diversify energy sources by industrializing hydrogen production. Saneg's operations at the refinery currently account for about 80% of the country’s oil production and 22% of its proven gas reserves and the acquisition its industrial hydrogen assets for $140 million by Air Products, promises to widen the commercial use of the product in Uzbekistan. Saneg's founder Bakhtiyor Fazilov commented: "This agreement with Air Products represents another significant step forward in our long-term modernization plans for the Ferghana Refinery with the world leader in hydrogen production… and contribute to one of the Uzbekistan government’s main priorities, strengthening our nation’s energy security by increasing domestic hydrogen supplies." Reporting on the transaction, Seifi Ghasemi, Chairman, President, and CEO at Air Products, stated: "As the world’s largest hydrogen supplier and a leader in hydrogen fueling infrastructure, Air Products’ solutions bring safe and reliable hydrogen to hydrogen-powered applications worldwide. Our advanced technology and expertise in hydrogen production will enhance the refinery's capabilities and support the growth of Central Asia's oil and gas industry. This will also aid Uzbekistan in achieving more sustainable and energy-independent operations, contributing to a cleaner future for the Republic."

Kazakhstan Delivers Oil to Europe via Russia

Kazakhstan has begun supplying oil to Europe via the Druzhba oil pipeline system through Russia. The first oil shipments have already arrived in Germany, where amid current geopolitical challenges, it has become an important part of the country's energy security . Acting through its Kazakh subsidiary Agip Caspian Sea, the Italian company Eni, has shipped the first 20,000 tons of oil as part of a test delivery via the Atyrau-Samara route, with further transportation via the Druzhba pipeline. Kazakhstan now plans to deliver up to 1.2 million tons of oil to Germany via this system this year, following an agreement with the Russian side, to ensure uninterrupted supplies to Europe despite the sanctions restrictions on Russian oil. Historically, the pipeline has been one of the largest routes for Russian oil supplies to Europe, but its use has undergone significant changes in recent years due to sanctions. Faced with these changes, Kazakhstan's proposals to increase oil supplies through this route, could not only play a key role in ensuring energy stability in the region but also demonstrate the country's strategic importance as a major player in the global oil market and its ability to adapt to changes in global energy policy.

Kyrgyz-Turkish Oil Refinery Nears Completion in South Kyrgyzstan

On July 8, Minister of Energy of the Kyrgyz Republic, Taalaibek Ibraev inspected the construction of the Kyrgyz-Turk K-OilGas oil refinery in the village of Kok-Talaa in the southern Batken region. An agreement between Kyrgyztransneftegaz (Kyrgyzstan) and Kyrgyz-Turk K-OilGas (Turkey) on the joint development of the North Sokh and Chongara Galcha oil fields was signed back in March 2023. According to General Director of Kyrgyztransneftegaz Aibek Chodonov, over 90% of the refinery’s construction has now been completed, and preparatory work is currently underway at four oil wells. The commission of the refinery is scheduled for the end of September. Investment in the project amounts to $91 million, and once in operation, the refinery will have a daily capacity of 500 tons of oil products. At present, the refinery has 51 employees, including 10 Turkish specialists and 41 local citizens, with 150 new jobs on the horizon from October. Kyrgyzstan has some oil deposits in the south of the country but today, imports almost all of its oil products (gasoline and diesel) from Russia.

Turkmenistan and Iran Sign Natural Gas Swap Deal

From 1-3 July, Turkmenistan and Iran engaged in negotiations on the supply of natural gas. Reporting on the meeting in Ashgabat, Turkmenistan’s Foreign Ministry announced that a contract had been signed for the purchase and sale of natural gas of up to 10 billion cubic meters per year, to be supplied by Turkmenistan to Iraq through the territory of Iran under a swap scheme. According to the ministry’s statement, to accommodate increased supplies of gas, Iranian companies will also build a new 125-kilometer pipeline and three gas compressor stations in Turkmenistan. Under the new contract, the volume of Turkmen gas supplied to Iran along the Dovletabad – Sarahs – Hangeran route and through the Chaloyuk gas measuring station, will rise to 40 billion cubic meters per year. Despite being home to the world's second-largest natural gas reserves, Iran has experienced chronic natural gas shortages during the winter months, and rising domestic demand has limited the country’s ability to export gas. As a result of the gas swap with Turkmenistan, Iran will be able to meet its gas export commitments. Turkmenistan has the world’s fourth-largest proven natural gas reserves, but due to its geographical location and geopolitical environment, has faced difficulties in finding export markets for its gas. Today, China is the main buyer of Turkmen natural gas.

Kazakhstan and South Korea to Cooperate in Critical Minerals, Oil and Gas

During South Korean President Yoon Suk Yeol’s visit to Kazakhstan on June 12, agreements were made on cooperation in critical minerals and metals, as well as in the oil and gas industry. A Memorandum on partnership on critical minerals and metals was signed by the Ministry of Trade, Industry and Energy of the Republic of Korea and the Ministry of Industry and Construction of Kazakhstan. The document represents the first step towards the establishment of an international chemical analytical laboratory in Kazakhstan and aims to strengthen cooperation between the two countries in the supply of lithium, nickel, cobalt, tantalum, tungsten, beryllium, niobium, titanium, rhenium, phosphorus, copper, aluminum, chromium, manganese, and rare earth metals. An additional Memorandum on security and development of the critical minerals supply chain was signed by the Korean Institute of Geoscience and Mineral Resources, Korea’s SK Ecoplant Co. Ltd., and the Ministry of Industry and Construction of Kazakhstan. The agreement provides for a comprehensive exchange of information on supply chains for critical minerals and metals, joint geological exploration and production of critical minerals and metals, and the mining and processing of lithium to produce lithium batteries. Kazakhstan’s national oil and gas company KazMunayGas and Hyundai Engineering, South Korean EPC engineering company, signed an agreement on cooperation in the oil, gas and petrochemical industries. Aimed towards exploring opportunities for cooperation in the above, it includes provision for technology exchange, specialist training, and the transfer of technical knowledge and experience.

Kazakhstan and Congo Ready to Cooperate in Oil and Gas

On June 11, Chairman of the Board of Kazakhstan’s national oil and gas company KazMunayGas (KMG), Askhat Khasenov attended a meeting in Astana with Adviser to the President of the Republic of Congo for strategic issues and international negotiations, Francoise Joly, and General Director of Congo’s national petroleum company SNPC (Societe nationale des petroles du Congo), Maixent Raoul Ominga. The Congolese officials opened discussions by stating that after Nigeria and Angola, their country is Africa’s third largest player in the oil and gas sector. It was stated that whilst SNPC actively cooperates with international companies (Total Energies, Chevron, Eni), the company seeks to attract new investments to maximize the potential of its energy projects. The parties exchanged views on potential cooperation in the oil and gas sector, including trade in oil and petroleum products and human capital development, and agreed to work towards the signing of a cooperation agreement between KMG and SNPC. On 10 June, in preparation for the state visit of the President of the Republic of Congo, Kazakhstan President Kassym-Jomart Tokayev received Ms. Joly. In addition to identifying promising areas of bilateral cooperation, Tokayev expressed his readiness to strengthen contacts with the Republic of Congo.