Lukoil to invest nearly $680 million in Uzbekistan gas projects
By Aynur Jafarova
Russia's energy giant Lukoil plans to invest over $678 million in
two PSA gas projects in Uzbekistan - Kandym-Khauzak-Shady-Kungrad
and South-West Gissar - under the country's state investment
program.
The total cost of the two projects is over $4.34 billion,
including the cost of the Kandym-Khauzak-Shady-Kungrad at $3.146
billion and the other project estimated at $1.196 billion.
The sides signed the PSA for Kandym-Khauzak-Shady project for 35
years in June 2004. The PSA came into effect in November 2004.
The Kandym and Khauzak-Shady fields are located next to each
other, close to the Uzbekistan-Turkmenistan border. The Kungrad
block is located in Karakalpakstan in Uzbekistan. Exploration is
currently underway at the block. Comprehensive interpretation of
seismic, logging and drilling data has resulted in significant
clarification of the block's geological structure; estimation of
hydrocarbon resources is in progress.
The Khauzak gas field was put into operation in November 2007.
Production of gas at West Shady started at the end of 2011. The
northern part of the Shady section is expected to start operation
in 2014 with a substantial increase in production planned.
Lukoil plans to commission the Kuvachi and Alat fields located in
the territory of the Kandym group, which consists of six
gas-condensate fields, in 2014.
In 2014, Lukoil plans to commission the first phase of the complex with a processing capacity of 1.5 billion cubic meters of natural gas per year. It is expected that a contract for the project will be signed in 2013. Gas from the complex will be supplied to the Mubarek Gas Processing Plant (GPP) and from 2016 -- to the Kandym gas refinery.
The PSA for the South-West Gissar project was signed in January
2007 for 36 years and came into effect in April 2007. Lukoil joined
the project in March 2008. The contract area of Kashkadarya where
the field is located is operated by Lukoil Uzbekistan Operating
Company, which is the single operator.
Seven fields are located in the contract area of Kashkadarya -
Adamtash, Dzharkuduk-Yangi Kyzylcha, Gumbulak, Amanata and
Pachkamar, oil and gas condensate field South Kyzylbayrak and
Koshkuduk oil field with approved geological reserves of about 100
million tons of standard fuel.
The fields' reserves are estimated at 82.3 billion cubic meters of
gas and the maximum volume of production in the period of constant
selection will exceed 4.2 billion cubic meters per year.
Production of gas under the Gissar project, annual production of
which is expected to reach 1.1 billion cubic meters, began in late
2011.
According to Lukoil, the company plans to produce at least 18
billion cubic meters of gas in Uzbekistan by 2016. By early 2014,
gas production in the country will total nearly 10 billion cubic
meters.
Besides the development of the South-West Gissar and
Kandym-Khauzak-Shady-Kungrad fields, Lukoil is carrying out
geological exploration of the Western Aral structure along with
Uzbekneftegaz, China National Petroleum Corporation (CNPC) and
Korea National Oil Corporation (KNOC).
Lukoil assumes that the total volume of investments will exceed
$5.5 billion, which will turn the company into the largest investor
in Uzbekistan's economy.