Overview

Uzbekistan has large hydrocarbon resources, including 1.1 trillion cubic metres of proven gas reserves, according to the 2014 BP Statistical Review.

However, government intervention, corruption, terrorism and human rights issues have proved strong deterrents to foreign investment, meaning the country has struggled to develop its resources. High domestic consumption has also hampered its export capacity.

Uzbekistan is a landlocked country with extensive access to gas. Much of the population is connected to pipeline gas, which is sold at a heavily regulated – and subsidised – price. The infrastructure network also allows for exports to Russia and neighbouring Kyrgyzstan and Tajikistan.

Exports are by far the country’s most lucrative segment in terms of gas sales, but domestic demand is high. Uzbekistan produced 55.2 billion cubic metres of gas in 2013 and consumed was 45.2 bcm.

Uzbekistan exported 13 bcm of gas in 2013, according to national oil and gas company Uzbekneftegas. The country does not publish official data on gas exports.

Tashkent is aiming to increase gas exports by 20% by 2020, mainly as a result of energy conservation efforts within the domestic market. Gas consumption by domestic industry is slated to fall by 5-7% by 2020, while household use is expected to hold nearly steady at the 2013 level, Uzbekneftegas said.

The completion of the first three lines of the Central Asia-China Pipeline (CACP) has opened an alternative market for Uzbek gas. At capacity, Line C will source 10 bcm/y from Uzbekistan. The network will be able to ship 55 bcm/y in total.

Uzbekistan exported 2.92 bcm to China in 2013, according to Chinese customs data. It did not export any volumes to China in March this year, suggesting domestic consumption was prioritised.

Russia’s Lukoil plays an important part in Uzbekistan’s production. The company is targeting 18 bcm in 2016.

The next presidential election, scheduled for 2015, raises questions over President Islam Karimov’s successor amid reports of his ill health. Uzbekistan’s sometimes strained relationship with the West in the past decade has improved, with western companies showing renewed interest in developing Uzbek oil and gas resources.

Page updated: 26/09/2014