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On September 28, Kyrgyzstan's largest oil refinery, located in the southern city of Jalal-Abad, began a large-scale modernization. Operated by Kyrgyz Petroleum Company, the refinery produces AI-80 gasoline, diesel fuel, and fuel oil. Kyrgyzstan's annual gasoline and diesel fuel demand is 1.4 million tons. The refinery in Jalal-Abad can meet only 6.5% of that demand. After the modernization project, the refinery will be able to meet 32% of the domestic demand. After modernization, AI-92 and AI-95 gasoline production would increase more than 12-fold, and diesel fuel production would grow by 40%. The total investment in modernizing the refinery will amount to $410 million, including $200 million in foreign investments and $110 million from the Kyrgyz government. Today, almost all gasoline and diesel fuel used by Kyrgyzstan is imported from Russia. The Times of Central Asia earlier reported that Kyrgyzstan proposed oil-rich Azerbaijan to sign a long-term contract to supply Azeri crude oil to Kyrgyzstan. Azeri crude oil is needed for Kyrgyzstan’s Junda oil refinery. Located in Kara-Balta, about 100 kilometers west of Bishkek, the refinery reopened late in August after a major overhaul. It now plans to reach its total annual capacity of processing 800,000 tons of crude oil by the end of this year.
At a meeting with Azerbaijan’s Energy Minister Parviz Shahbazov, his counterpart from Kyrgyzstan, Taalaibek Ibrayev, proposed signing a long-term contract to supply Azeri crude oil to Kyrgyzstan. The bilateral meeting took place on September 16 in Bishkek, on the sidelines of the 4th meeting of energy ministers of the Organization of Turkic States (Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, and Uzbekistan). Representatives of Turkmenistan and Hungary attended as observers. The Azeri Energy Minister expressed its readiness for cooperation, and proposed establishing a special working group to organize oil supplies. Ibrayev also proposed that Azerbaijan participate in hydropower and renewable energy projects in Kyrgyzstan, and consider preferential financing of $2 million from the Azerbaijan-Kyrgyzstan Development Fund for the purchase and installation of charging devices for electric vehicles in Kyrgyzstan. Today, Kyrgyzstan’s local capacity for refining crude oil and producing motor fuel covers about 5% of domestic demand, with the rest imported from Russia. During Kyrgyz President Sadyr Japarov’s visit to oil-rich Azerbaijan earlier this year, negotiations were held with the Azeri state oil company, SOCAR, on Azerbaijani oil supplies to Kyrgyzstan’s Junda refinery. Energy Minister Ibrayev commented that the Junda oil refinery requires more than 1 million tons of crude oil annually for refining. On August 30, the refinery reopened in the town of Kara-Balta, about 100 kilometers west of Bishkek. Late in March, the refinery completed a significant overhaul and plans to reach its total annual capacity of processing 800,000 tons of crude oil by the end of this year.
Uzbekistan’s Saneg oil refining company has begun processing Afghan crude oil at its Fergana refinery, to help ease Afghanistan’s energy shortages under Taliban rule. The first shipment of oil was transported by rail from the Hairatan terminal in Afghanistan's northern Balkh province. Afghanistan faces a significant energy crisis due to supply issues from Iran and Turkmenistan. The Taliban wants to restart domestic oil production to reduce its dependence on imports. Afghan crude oil, mainly extracted from the Amu Darya basin, is not fully used because Afghanistan needs more facilities to refine it. However, fortunately for Afghanistan, its neighboring countries to the north and west are willing and capable of supplying electricity, gas, and light oil products so that the country can, to some extent, improve its energy security. The refining agreement represents one of the first cross-border collaborations for Afghan crude oil, despite the historically complex relations between Afghanistan and Uzbekistan. Other countries, such as Russia and Kazakhstan, are looking at similar opportunities to gain market share and indirectly support the Afghan economy. This shows how the Central Asian countries are changing their strategies while Afghanistan is isolated internationally. For example, at the end of April this year, a delegation from Kazakhstan paid an official visit to Kabul, where a meeting of the Kazakh and Afghan businesses and an exhibition of Kazakh products were held. The visit to Kabul shows Astana’s intention of using trade to improve Kazakhstan’s relations with the new Afghan government. Saneg’s initiative to process Afghan oil is part of Uzbekistan's strategy to boost its refining and seize business opportunities in a volatile region. Exporting refined products to Afghanistan could bring extra revenue, and help a struggling neighbor. However, political instability and fragile relations may limit the long-term benefits. Companies from Russia are also interested in similar deals. Uzbekistan has also signed five agreements on mining projects in Afghanistan. These agreements, worth $1.15 billion, were part of a larger package of 35 agreements and memoranda of understanding signed between the two countries. These agreements increased Uzbekistan’s investment in Afghanistan by more than $2.5 billion.
Tajikistan wants to establish cooperation with Russia's Tatneft to open an oil refinery in the Dangara free economic zone, in Tajikistan's Khatlon region. This was announced by the country’s Minister of Industry and New Technologies, Sherali Kabir, during a recent investment forum in Dushanbe between Tajik and Russian companies. “One of the most important issues that we see in the development between our countries is the improvement of our production capacities, including the production of fuel and lubricants, cooperation, and the creation of new mechanisms. If we launch this enterprise together with Tatneft, we can achieve great progress in this regard.” Kabir said. It is noted that this will help Tatneft enter the markets of Afghanistan and Pakistan. “As was said, up to 30% of Tatneft’s raw materials are exported. Bring them here (Tajikistan), process them — and imagine what a huge market the company could open up for itself. 40 million people in Afghanistan, and over 230 million in Pakistan,” Timur Yoribek, Head of the International Relations Department of the Ministry of Industry of Tajikistan, commented. According to him, Tajikistan has ideal logistics routes for this — seven bridges leading to Afghanistan, and the shortest links to the Pakistani seaports. Construction of the Dangara oil refinery began in 2014 and was completed in 2018. The plant's planned capacity is 1.2 million tons of oil per year, but the commissioning has been delayed due to a shortage of raw materials. Tajikistan produces a small amount of oil, which is not enough to supply the refineries.
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."
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.
