Oil, gas, energy and metallurgy are the newsmakers of the week… again. Pushing on for some quite obvious conclusions on the region’s priorities.
This week, Toronto hosted the Kazakh-Canadian business forum dedicated to exploring investment opportunities in the mining and metallurgical industries. The forum was attended by the Kazakh Deputy Minister of Foreign Affairs, as well as top managers of leading Canadian companies like Hatch, Cameco Corporation, B2Gold, Arras Minerals, Nutrien, Teck Resources, Limited, Ion Energy and others. MoUs were signed between Kazakhmys Corp and First Quantum on exploration projects in Kazakhstan.
More so, the oil and gas sector received an even stronger impetus. This month, KazTransOil is planning a trial shipment of 7,000 tons from the Kashagan field through the seaport of Aktau to the port of Baku. INPEX North Caspian Sea became the shipper of the oil under the Production Sharing Agreement for the North Caspian Sea (SPSA). Earlier, the Minister of Energy of Kazakhstan mentioned that Kazakhstan plans to increase oil exports via alternative routes, including through Azerbaijan and up to 6-6.5 million tons.
A more recent statement from the minister was KazTransOil’s plan to ship another batch of 20,000 tons of oil to Germany. The delivery will be carried out via the Druzhba pipeline in April this year. This cooperation is only accelerating, given that in the first quarter of this year Kazakhstan has already delivered 300,000 tons to Germany, and, according to agreements between the countries, this amount should reach 1.2m tons by the end of this year.
KazTransOil also made headlines in Tashkent. In March, the company will supply 25,000 tons of oil from Russia to Uzbekistan. Deliveries are expected to increase by over 10x by the end of the year. The transit agreement between the countries was formalized in December 2022, during President Tokayev’s visit to Tashkent, when UNG and KMG national oil and gas companies agreed to supply 300,000 tonnes of oil from Russia, worth $9m.
In other oil and gas news came from Iran, when it announced its readiness to increase gas exchange with Turkmenistan. The National Iranian Gas Company (NIGC) is exploring new opportunities to export natural gas to neighboring countries, including through swap deals. At present, appropriate routes have been laid for the export of 10 million cubic meters of gas to Iraq, 30 million to Turkey, 6 million to Azerbaijan and 1 million to Armenia.
The topic of oil products in Uzbekistan was supported by German companies that intend to organize tire processing in the country. Germany's Matteco and Selfus plan to produce construction materials from imported raw materials. The companies plan to create a joint venture with a full cycle of used tires collection, recycling and recycling of processed products in Tashkent.
Still, the topic of energy production remained more pertinent for Uzbekistan. This week, the Minister of Investment, Industry and Trade held meetings with the largest power plant contractors in the country. Among others, Turkish Cengiz Enerji distinguished itself by offering to build another 400 MW thermal power plant in Jizzakh, which will be the fourth project in the republic for the company. The company said that its technology will save 286 million cubic meters of gas per year.
Meanwhile, the result of the meeting between the Kyrgyzstan and Uzbekistan PMs last weekend was the signing of more than 15 documents. Major agreements included projects to organize SKD assembly of automotive and commercial vehicles, as well as memorandums on the establishment of pharmaceutical production. In addition, agreements were signed on the construction of shopping centers, the manufacture, assembly and production of smart meters, as well as plastic products and furniture.
Dushanbe also succeeded in promoting its interests abroad and planned another investment forum for Tajikistan, this time with the UK. The forum will be held at the end of March in London. It is expected that the event will be attended by representatives of the relevant government agencies of the two countries, as well as entrepreneurs working in the fields of energy, manufacturing, services, logistics and pharmaceuticals.
Ashgabat upped the ante and held negotiations on the issue of joining the WTO, organising state meetings with WTO representatives, the International Trade Center and the UNECE. The Turkmen side stressed the importance of creating internal institutional mechanisms for negotiations, studying the consequences of joining the WTO and bringing national legislation in line with the rules of the Organization.
Before we go, for those looking for some bedtime reading on the energy sector in Central Asia, check our firm's view on the prospects of nuclear energy in Uzbekistan.