Transcontinental Silk Road Strategies by Timur Dadabaev

Author:Timur Dadabaev [Dadabaev, Timur]
Language: eng
Format: epub
Tags: Science, General, Social Science, Regional Studies, Technology & Engineering
ISBN: 9780429557880
Google: TgScDwAAQBAJ
Publisher: Routledge
Published: 2019-06-06T04:56:05+00:00

The case of Japanese energy-related infrastructure development in Uzbekistan

In addition to transportation infrastructure development, another area of active Chinese and Japanese engagement is energy-related infrastructure development. The issues and patterns of cooperation between CA countries and China and Japan are also well exemplified by the case of their interactions with Uzbekistan. Chinese interest in this energy-rich CA country relates to three types of engagements: energy-based resource export infrastructure (from Uzbekistan to China), new extraction infrastructure and the creation of an energy resource processing sector of the economy.57

The most recent and the largest agreements between Uzbekistan and China have been those focusing on the joint production of synthetic fuel (US$3.7 billion), investing in Uzbekistan’s oil industry (US$2.6 billion), and agreements on cooperation in the construction of energy generation plants (US$679 million).

Among Uzbekistan’s exports to China, mineral and natural resources constitute a considerable share of the trade between the countries. According to agreements concluded in May 2017 during Mirziyoyev’s visit to China, contracts identified natural gas (six billion cubic meters worth US$734 million), uranium (US$30 million), textiles (US$200 million), leather (US$21.3 million), and agricultural products (US$1.6 million) as products to be exported to China by the end of 2017. In addition, plans have been articulated for additional exports of natural gas to reach US$2.4 billion for the years 2018 to 2020.58

There are a few plans for the construction of additional natural gas pipelines to connect Turkmenistan, Uzbekistan and Kazakhstan to Chinese consumers. However, these discussions have not yet materialized into specific construction projects or financial commitments because of questions regarding the economic sustainability of the pipelines’ operations.

In terms of new extraction rights, CNPC (the China National Petroleum Corporation) secured the co-financing contract with the Bank of China for a drilling project at the gas condensate field in Bukhara by establishing JV New Silk Road Oil and Gas, which was set up by Uzbekneftegaz (UNG) and China’s CNODC (China National Oil and Gas Exploration and Development Corporation, a subsidiary of CNPC).59 According to the license granted to the joint venture, it plans to develop the existing wells and drill another 16, with annual production to reach one billion cubic meters of natural gas and 6,500 tons of condensate.60

In terms of the generation of new industries, Uzbekistan concluded an agreement between UNG and the Chinese Development Bank (worth US$3.7 billion, of which US$1.2 billion is to be financed by China) to finance the establishment of a plant to produce synthetic fuel at Uzbekistan’s largest gas refinery complex, Shurtan.61 Accordingly, the plant is intended to process 3.6 billion cubic meters of natural gas into 743,500 tons of synthetic fuel, 311,000 tons of aviation fuel, 431,100 tons of naphtha fuel and 20,900 tons of liquefied gas.62 Interestingly, technological support for the plant is to be provided by South Korea’s Hyundai Engineering & Construction under a license provided by South Sasol. The technology for turning natural gas into liquefied gas is provided by the Dutch firm Haldor Topsoe.

Hydro-energy generation has also been an area of Chinese interest,

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