In October 2023, Uzbekistan started importing fuel from Russia by way of Kazakhstan. The preliminary quantity, meant to cowl winter shortages, was cited as 2.8 billion cubic meters (bcm) a year (9 million cubic meters per day). That determine appears set to develop significantly, with TASS reporting on March 5 that supplies offered to the board of the Kazakh Ministry of Vitality said plans to extend that quantity to 11 bcm from 2026.
Daryo.uz expanded on the TASS report, noting that an Uzbek authorities funding program for the primary quarter of 2024 “outlined intentions to spice up fuel imports from Russia from the prevailing 9 to 32 [million] cubic meters per day.” And Kun.uz famous that in December 2023 Russia’s Gazprom doubled exports to Uzbekistan on the request of the Uzbek authorities to satisfy hovering winter demand.
As Russian fuel started to circulation to Uzbekistan again in October, Gazprom head Alexey Miller said discussions have been underway on a 15-year cooperation settlement between Russia and the Central Asian international locations, specifically Kazakhstan, Kyrgyzstan, and Uzbekistan. Russian Ambassador to Uzbekistan Oleg Malginov talked about discussions on a long-term agreement and a rise in quantity final month.
A current World Bank report on achieving net zero emissions in Europe and Central Asia famous that “Central Asia faces a tightening fuel provide steadiness” and would probably be compelled to make robust choices to both kind a “Central Asian Fuel Union” with Russia or be compelled to cut back exports to China.
“A fuel union amongst Russia, Kazakhstan, and Uzbekistan may assist plug Central Asia’s provide hole within the quick time period and maintain wholesome ranges of pipeline fuel flows from Central Asia to China, however it isn’t with out challenges,” the report said. The World Financial institution famous that “further infrastructure upgrades would probably be required to accommodate the upper flows” envisioned.
Given the restricted availability of underground fuel storage within the area, it is a prime space for funding. The World Financial institution report identified that Central Asia has significantly low storage (8 % of consumption) and argued that “international locations in Central Asia suffered episodes of fuel shortages and blackouts throughout current winters in consequence.”
Kun.uz reported that plans are afoot to broaden the storage capability at Uzbekistan’s Gazli fuel storage facility, positioned in southwestern Bukhara area, in two phases. The primary part envisions doubling storage capability at Gazli from 3 bcm to six bcm. The second part will search to extend whole storage capability to 10 bcm. The mission’s price ticket is cited as $850 million.
The World Financial institution report went on to notice that “[m]odeling outcomes point out that an extra 10 bcm of Russian fuel within the area by 2025 would assist preserve secure export ranges from Central Asia to China and help rising home consumption throughout the area in 2023–25… The bottom case with out a fuel union would see Central Asia’s manufacturing and export ranges contract between 2023 and 2025.”
The World Financial institution report doesn’t point out political or corruption dangers related to rising the fuel commerce between Russia and Central Asia. These dangers are arguably important and additional amplified by the struggle in Ukraine. The Gazli fuel storage facility talked about above as a goal for funding and capability growth is a working example. A recent RFE/RL investigation discovered that management of the $850 million Gazli fuel storage growth, which a previous investigation linked to sanctioned Russian tycoon Gennady Timchenko, “has been transferred to an obscure offshore agency owned by an Uzbek political insider [Bakhtiyor Fozilov] with whom Timchenko has industrial ties.” The opacity of such transfers, and the murkiness of the enterprise setting writ giant, is ripe territory for corruption.
