Uzbekistan faces gas shortages, Kazakhstan could be next
By Asif Aydinli
Russia's gas giant Gazprom has signed contracts with Kazakhstan for gas transit to Uzbekistan and Kyrgyzstan at the St. Petersburg International Economic Forum, TASS news agency reports from the signing ceremony.
Additionally, Gazprom and Kazakhstan signed an action plan to prepare the SAC system facilities for increasing the transportation of Russian gas to Uzbekistan.
In an interview with News.Az, Igor Yushkov, a leading analyst at the National Energy Security Fund and an expert at the Financial University under the Government of the Russian Federation , said that Kazakhstan and Uzbekistan represent a new market for Gazprom, which is mutually beneficial for both Central Asian countries and Russia.
"A year ago, at the St. Petersburg Economic Forum , Gazprom signed a contract for the supply of gas to Uzbekistan. In Central Asia, except for Turkmenistan, all countries face gas problems. Consumption is growing rapidly, and domestic gas production cannot meet this demand," he said.
"Uzbekistan, previously a gas exporter, has become an importer. A year ago, a gas supply agreement was signed, which turned out to be timely, as during the 2022-2023 heating season, the local system collapsed in Uzbekistan, and there was not enough gas even with the suspension of exports to China. Due to the gas shortage, the water in the boilers did not heat sufficiently, and it was cold in the apartments in Tashkent. People had to warm themselves with bonfires. In June 2023, Uzbekistan signed a contract with Gazprom, and by October, Russian gas began to flow into Uzbekistan via Kazakhstan. This was the right decision, as there were also frosty weeks in Uzbekistan during the winter," the Russian expert noted.
According to Yushkov, in December, when Gazprom CEO Alexei Miller reported to Russian President Vladimir Putin on the year's results, he specifically noted that at the request of Uzbek counterparts, gas supply was increased beyond contractual volumes to 9 million cubic meters per day.
"Throughout December 2023, Gazprom supplied gas to Uzbekistan at the maximum capacity of the Central Asia-Center pipeline. Without this contract, Uzbekistan would have faced great difficulties," he said.
"Gas production in Uzbekistan continues to decline, while consumption is growing. Therefore, the parties signed a new contract, increasing supplies from 2.8 billion cubic meters per year to over 3 billion cubic meters per year. The contract overall implies the supply of 11 billion cubic meters. To ensure such volumes, it is necessary to expand the transportation system. The new contract aims for Kazakhstan to be ready for increased volumes and to modernize its transportation system. However, Kazakhstan also faces growing domestic gas consumption. Although the country still exports gas to China, it is evident that the situation is becoming more complex over time. In 2023, Kazakhstan managed to stabilize gas production, but shortages are possible in the future. Therefore, Kazakhstan needs to consider its gas needs and the share of coal generation in the energy balance. On the one hand, Kazakhstan is talking about decarbonization and reducing coal's share, on the other, it signs a contract with Russia to build three coal-fired power plants," he added.
"Kazakhstan needs to clarify its energy strategy and gas consumption plans, as well as modernize its gas transportation system considering its needs, not just transit to Uzbekistan. This contract is only the first step. In the future, Kazakhstan may also sign a contract with Gazprom for gas supply and expand the gas transportation system for its needs," Yushkov stated.
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